This major TaxCycle release extends Canada Revenue Agency (CRA) and Alberta certification for T2 and AT1 returns with corporate year ends up to May 31, 2018. (Québec CO-17 continues to support tax years ending in 2016 up to May 31, 2018). We are also excited to add the new T2 Auto-fill and T2 Attach-a-doc services to TaxCycle.
This version is available as a full download from our website, and a free trial.
Who should install this release?
Please update to this release to get the latest Schedule 10 changes and to extend the T2 and AT1 certification to May 31, 2018.
- T2 and AT1 certification extended
- Revised federal T2 forms
- Revised provincial corporate tax forms
- Mandatory AT1 Net File
- New!—T2 Auto-fill
- New!—T2 Attach-a-doc
- 2017 T4/T4A, T5018, NR4 ready for filing
- 2017 T5 remains in preview
- New!—Optional field for explanatory notes when amending slips
- New!—Forms module additions: RC145, T2062A
- Other enhancements and fixes
T2 and AT1 certification extended
TaxCycle is certified for the preparation and filing of federal T2 and Alberta AT1 corporate tax returns with tax year ends up until May 31, 2018. (For Québec CO-17 returns, TaxCycle continues to support year ends ending in 2016 up to May 31, 2018.)
Revised federal T2 forms
Small business deduction rate on the T2 jacket and TaxConstants worksheet
Per the Department of Finance Canada announcement on October 16, 2017, the small business tax rate has been lowered to 10% in 2018 and to 9% in 2019. As such, the small business deduction rate has been adjusted by increasing it to 18% (effective January 1, 2018) and 19% (effective January 1, 2019), respectively.
Line 418 (Incorporation expenses under 20(1)(b)) has been added. New paragraph 20(1)(b) provides rules allowing the deduction of incorporation expenses of up to $3,000 per corporation. Incorporation expenses in excess of $3,000 are to be included in the new class 14.1. For more details, please read the Schedule 10, AT1 Schedule 14, and class 14.1 help topic.
When you select class 43.1 and/or 43.2 on Schedule 8, the following new types of asset codes become available in column 301 of the table at the bottom of the form:
- 23 Geothermal energy equipment - acquired after March 21, 2017
- 24 Thermal energy source - acquired after March 21, 2017
Effective January 1, 2017, the rules governing eligible capital property (ECP) are replaced by the new Class 14.1. Property that would be eligible capital property prior to January 1, 2017 will become depreciable property in the new Class 14.1 after December 31, 2016. To address this change:
- Pages 3 and 4 have been added to Schedule 10.
- If the tax year starts after 2016, Schedule 10 is no longer submitted to the CRA when filing.
For more details, please read the Schedule 10, AT1 Schedule 14, and class 14.1 help topic.
Part 3 contains a new check box for a corporate officer.
- The revised T2054 now has line numbers.
- Please note that the election is now mailed to the following addresses:
- For Alberta, Manitoba, Saskatchewan and the Northwest Territories:
Saskatchewan Tax Services Office
340 3rd Avenue North
Saskatoon SK S7K 0A8
- For all other provinces and territories:
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE C1N 6A2
Revised provincial corporate tax forms
- AT1 Schedule 3—Minor update
- AT1 Schedule 14—Minor update
- Schedule 14 worksheet—This new schedule mirrors pages 3 and 4 of federal schedule 10. For more details, please read the Schedule 10, AT1 Schedule 14, and class 14.1 help topic.
- Schedule 427—Revised to reflect the increase in the general corporate income tax rate to 12% from 11% effective January 1, 2018
- Schedule 421—Minor update
- Schedule 428—Minor update
- Schedule 429—Minor update
- T666—Minor update
- Schedule 380—Minor update
- Schedule 385—Minor update
- Schedule 390—Minor update
- Schedule 391—Minor update
- Schedule 392—Minor update
- Schedule 393—Minor update
- Schedule 366—Form was revised to reflect the November 14th announcement to reduce lower tax rate from 3.0% to 2.5%, effective April 1, 2018.
- Schedule 348—Minor update
- Schedule 500—Per the 2017 economic outlook and fiscal review on November 14, 2017, the corporate tax rate for small businesses will be decreased to 3.5% from 4.5% (Ontario small business deduction rate increased to 8% from 7%), effective January 1, 2018.
- Schedule 504—Minor update
- Schedule 508—Minor update
- Schedule 554—Minor update
- Schedule 556—Minor update
- Schedule 558—Minor update
- Schedule 566—Minor update
- Schedule 402—Minor update
- Schedule 403—Minor update
- Schedule 411—Per the November 6th introduction to the legislative amendment, this schedule was revised to increase the Saskatchewan small business deduction limit from $500,000 to $600,000. In addition, general corporate tax rate of 12% has been restored.
Mandatory AT1 Net File
As per Bill 15 which received Royal Assent on June 7, 2017, electronic filing of AT1 returns is now mandatory for an AT1 return with a tax year ending after December 31, 2017. The following excepts are from Bill 15:
Failure by corporation to file return by way of electronic filing
37.3 Every corporation that fails to file a return for a taxation year as required by section 36.1(2.1) is liable to a penalty equal to $1000.
Failure by tax preparer to file return by way of electronic filing
37.4 Every tax preparer who fails to file a return as required by section 36.1(2.3) is liable to a penalty equal to $100 for each such failure in respect of a return of a corporation.
We are excited to add T2 Auto-fill to the list of electronic services offered in TaxCycle. Similar to T1 Auto-fill my return, the T2 Auto-fill is a secure service that allows business owners and authorized representatives to use TaxCycle to download information from the Canada Revenue Agency (CRA).
T2 Auto-fill provides the following information for download:
- (Re)assessed T2 return data for the current and the four previous years (downloadable as .COR file)
- T2 return balances, including:
- Refundable dividend tax on hand (RDTOH)
- General rate income pool balances (GRIP)
- Non-capital losses
- Capital gains and losses
- Capital dividend account balance
- Corporation account balances
- Business number address, email, and return mail indicator
For more details on the available information and for a list of schedules and fields not available from T2 Auto-fill, see the CRA's About T2 Auto-fill page.
In TaxCycle T2, the process is similar to the T1 Auto-fill my return process. Full instructions are available in the T2 Auto-fill help topic. The basic process is as follows:
- Starting from a T2 corporate tax return, click T2 Auto-fill on the Data menu to log into the CRA's website.
- You will see a summary of the information available to download. At this point, you can also select a (re)assessed return to download in COR format. (You can only download one year's (re)assessed return at a time.)
- Next, TaxCycle downloads the data and shows a summary of where the imported data will appear. In general, any data downloaded is imported into the T2 Auto-fill worksheet.
- TaxCycle uses the information on the T2 Auto-fill worksheet to check for mismatches between the information in the tax return. You will see review messages when there is a mismatch.
- If you chose to save the (re)assessed return in COR format, the path to this file also appears on the T2 Auto-fill worksheet.
Please read the T2 Auto-fill help topic for details on each step of this process.
We are excited to add the CRA's new T2 Attach-a-doc service to TaxCycle T2. This service allows you to electronically file a corporation's supporting documentation with the Canada Revenue Agency (CRA) directly from TaxCycle. These are usually documents required for the assessment of a T2 tax return. Please read the T2 Attach-a-doc help topic for full details on how to use this service.
The type of documents you can transmit with the T2 Attach-a-doc service is limited to a specific list of certificates and documents. This list appears on the AttachADoc worksheet in TaxCycle T2. You cannot upload documents other than those on this worksheet. Likewise, you cannot use it to transmit documents usually submitted through a CRA My Business Account, or to file T106, T1134 and/or T1135 returns.
To upload documents using the T2 Attach-a-doc service, you must:
- Use your EFILE number and password to file. Or, have a Web Access Code (WAC) for the corporation. For information on where to enter these credentials, read the T2 Corporation Internet Filing help topic.
- Have filed the initial or amended T2 corporate tax return electronically within the last 24 hours.
- Keep the confirmation number of the T2 return. (TaxCycle will automatically retain this for you.)
- Only upload documents in one of the following file types: pdf, doc, docx, xls, xlsx, rtf, txt, jpg, jpeg, tiff, tif, xps.
- Limit the size of all documents in a single transmission to 150 MB. You may upload multiple documents in one transmission as long as it doesn't exceed this size. Or, you can make multiple transmissions to send documents that exceed the limit.
Please read the T2 Attach-a-doc help topic for full details on how to use this service.
2017 T4/T4A, T5018, NR4 ready for filing
The 2017 versions of TaxCycle T4/T4A and T5018 are ready for filing when the updated system opens in the new year. The forms and calculations have been updated to meet the requirements for the 2017 filing year.
2017 T5 remains in preview
The 2017 version of TaxCycle T5 remains in preview. You can begin data entry in this module.
New!—Optional field for explanatory notes when amending slips
All 2017 slips modules now contain a new, optional field for including notes on why the slips are being amended. This field appears in the Filing section on the Info worksheet. The information in this field is sent with the return when it is transmitted by Internet file transfer (XML).
Forms module additions: RC145, T2062A
The following forms have been added to the TaxCycle Forms module:
- RC145—Request to close business number program accounts
- T2062A—Request by a non-resident of Canada for a certificate of compliance related to the disposition of taxable Canadian property
Other enhancements and fixes
- Cantax® T2 files now carry forward from the Client Manager.
- T1 EFILE print set is now defaulted to off in 2017. This is little used now that the T1135 is electronically filed.
- Magic Folder options—Fixed a bug where exception folders from local settings were loaded and shown, even if there were no exception folders in the Options Profile. If you created exception folders, please check that your list of exceptions is still accurate.
- Client Manager—The Client Manager now indexes the latest VisualTaxTM file format.
- T1 Templates—References to the child fitness and arts credits have been removed from the T1 2017 PreSeason, Joint Pre-Season letters, as well as from the T1 2016 PostSeason and Joint Post-Season letters.
- T2 Client Letter—The content now changes based on whether the return has been electronically filed. This also applies to the sections on filing the T1135, Alberta AT1, Québec CO-17 returns.
- T2 Client Letter—The letter now contains a section on balances and filing the CO-17 return.
- GIFI import folder options—A new check box above the default GIFI import folder option allows you to automatically sync the default folder with that used for T2 client files.