Today, July 25, 2016, the Canada Revenue Agency (CRA) launched their Pre-Authorized Debit (PAD) web service pilot project. We are pleased to offer it now within TaxCycle T1.
The PAD service offers preparers an electronic method to submit a payment to the CRA on behalf of a taxpayer for paying an amount owing on their current-year T1 tax returns. You can use it instead of printing the T7DR(A) which requires your client go to their bank to make a payment.
Launching PAD at this time of year allows you to become acquainted with the service during the off-season. When the rush of tax season comes around, you'll be ready to offer it to your clients.
This service is not to be used to pay any other amount due to CRA, such as a balance due on prior-year returns.
You can use PAD to make multiple payments for a taxpayer; however, only one request can be active at a time. You cannot make another request until the payment date of the active request has passed. Any attempt to do otherwise will generate an error message.
You can make Pre-Authorized Debit (PAD) requests using version 6.0.29972.0 of TaxCycle. This version is currently only available as a full download from our website. Read more in the release notes.
How to make a Pre-Authorized Debit (PAD) request
PAD is currently only available in TaxCycle T1 2015.
- PAD transmissions use the same credentials as for EFILE, the EFILE Number and Password. If you entered these in options for T1 EFILE, they will work for PAD as well.
- When a taxpayer has an outstanding balance on their tax return, TaxCycle displays a review message suggesting making a PAD request. This message appears in the Review sidebar and also in the amount field in Part F of the T183. Click the Quick Fix link to Enter the balance due from the return. Of course, the taxpayer can choose to pay different amount (less or more) if they prefer.
- Once you do this, the Pre-Authorized Debit (PAD) box appears in the Transmit sidebar to guide you through the filing process.
- Resolve these messages by completing Part F of the T183, including entering: a withdrawal date at least five business days (but not over a year) in the future. Enter the taxpayer's banking details (enter these carefully as errors in this information may delay the request), and the signing date. Hover over the fields and over the review message in the sidebar to see a Quick Fix option like easily entering a date five business days in the future.
- Confirm the taxpayer has signed Part F of T183 before transmitting. Click the link to Print the T183. Once you have a signed T183 on file, click the Confirm signature link. TaxCycle records the signing date and the name of the person who confirmed the signature in the history for the file.
- The preparer must keep the signed T183 on file should the CRA request it.