Want to file your tax and wondering which free tax software to use in Canada? We’ve got you covered.
This post covers the options available to Canadians for filing their taxes, a list of the best free tax software in Canada and their features, the things to consider when choosing one and our recommendation for the best tax software.
How To File Your Tax In Canada
In general, there are 2 ways to file your taxes in Canada: On Paper or electronically.
We cover the 2 options in details below
How To File Your Tax Returns On Paper In Canada
About 12% of the total returns processed during the 2019 tax-filing season were done on paper. And the number and percentage continue to drop.
Despite this, CRA is still committed to serving anyone that wishes to file using this option.
The paper filing option is suited for seniors, those living in rural and remote areas and people with mobility restrictions.
So how does it work?
CRA sends the tax package to individuals that filed using paper in previous years. If you didn’t receive one but would like to file on paper, you can request for a copy of the tax package using the options below:
- Order online from CRA
- Contact CRA using the toll-free number at 1-855-330-3305; or
- Download and print the tax package yourself
Once you have the package, you’ll fill all the relevant forms and send them back to a tax office near you.
But note that it takes about 8 weeks before paper returns are processed, and the notice of assessment issued. So if you need your tax refund on time, filing electronically is a better option.
How To File Your Tax Electronically In Canada
This is the most common way for filing taxes in Canada. In fact, almost 90% of all tax filers for the 2019 tax filing season used an electronic option.
There are 3 electronic methods for those interested in filing their taxes online:
- NETFILE is an electronic tax filing service from CRA. It is for individuals that want to file their own taxes directly to CRA using a certified software. All the free tax software listed below are NETFILE-certified.
With NETFILE, you get an immediate confirmation that CRA has received your returns and tax refunds will be received earlier.
There are a few restrictions on who can file using NETFILE though. For example, you can’t use NETFILE if you are a non-resident of Canada, went bankrupt within the past 2 years or filing for a deceased person.
You can find a list of other NETFILE restrictions here.
- EFILE is used by CRA authorized service providers to send tax returns. If you use a tax professional or a CPA to file your taxes, they are most likely using a software that sends your returns to CRA using EFILE.
- File My Return allows eligible individuals to file their returns using an automated phone service. Only those with low income or fixed income, with their situations the same from year to year, are eligible to use this option. CRA sends an invitation letter through mail to the tax filers that are eligible in February.
Filing your tax returns using one of the electronic methods is fast and secure. And your returns will be processed quickly, and refund sent within 2 weeks if you have set up direct deposit.
Best Free Tax Software In Canada
If you’re looking to file your own taxes yourself and for free, here are 8 of the best free tax software in Canada to choose from:
1. TurboTax Free
TurboTax is brought to you by Intuit, the same company behind QuickBooks, the most popular accounting software for small businesses.
It has various paid options depending on your needs and a free version called TurboTax Free.
TurboTax has all the forms and schedules you need to file your tax return accurately. It is available online and on any device, so you don’t need to download any software to your computer.
You also get the following benefits:
- There is no income restriction to use the free version
- NETFILE certified and ReFILE if you need to amend your returns
- File up to 20 returns in a year
- Maximum refund guarantee
- 100% accuracy guarantee or get a refund of any CRA penalties.
- Data protection so you can file confidently.
Unlike some of the other free options below, TurboTax Free option is available for Quebec residents.
The paid option costs $19.99 and comes with better support, guides you through the tax preparation and automatically checks if you qualify for over 400 credits and deductions. You can get 15% off using this link.
It is a great option if you’re looking to maximize your tax refunds.
SimpleTax is a certified tax software by both CRA and Revenu Quebec.
SimpleTax operates using a pay-what-you-want model. That means, you can use the service completely free, but there’s an option to pay if you liked the service.
There are no income limits or restrictions on the type of return you can file, so its complete features are available to everyone.
It has a clean, simple, and easy to follow interface. It can handle both simple and complex tax situations, and suitable for both beginners and experienced tax filers.
Some of the other features of SimpleTax are:
- Auto-fill my return
- Step-by-step guidance
- Free support via email
- RRSP calculator: see how different RRSP contributions will impact your refund
- Financial recommendations: introduced after it was acquired by WealthSimple in 2019.
- File up to 20 tax returns in a year
3. H&R Block
H&R Block is one of the biggest tax software providers in the world. It offers a free version that can be used to file any tax return, regardless of the complexity.
It lets you import some of your tax slips automatically from either CRA or Revenu Quebec through the Auto-fill feature. And guides you through the filing process in logical and easy to follow steps.
If you need any help, support is provided through an Online Help Centre that has answers to many common questions. For more personalized help and unlimited tech support, you’ll need to upgrade to one of the paid tiers.
The paid options start at $19.99 or $29.99, with audit protection.
Other features include:
- Automatic return optimization
- NETFILE and ReFILE
- Available online and on any device.
CloudTax let’s you file your returns through NETFILE by answering a few basic questions.
The service is available online through a clean and simple interface. Some of its features include:
- Step by step guidance
- Autofill my return
- File from any device – mobile and desktop compatible
- Audit protection – $2.99/month
- Digital storage
It has both a free and paid option. The paid option costs $29 and it’s for those with self-employed, rental income or employment expense.
CloudTax is not available for residents of Yukon, Northwest Territories, Nunavut, or Quebec. It is the only free option with unlimited chat support.
Ufile is a NETFILE certified free tax software that lets you file electronically to CRA and Revenu Quebec. It’s been serving taxpayers for over 20 years.
It has both an online version and a desktop application. The online version can be used on any device, while the desktop application is only available on Windows Operating system.
The features include:
- Express Notice of Assessment (NOA)
- Available for Quebec residents
- Triple guarantee: Accuracy, satisfaction, and best tax result.
Ufile is completely free for:
- Those with a total family income less than $20,000
- Newcomers to Canada
- Post-secondary students, regardless of their income; and
- If you have a simple tax return, that is reporting only a single employment income (T4) or income from a government pension (OAS or CPP/QPP).
If you don’t fall into any of those groups, there are paid versions starting at $19.95
StudioTax is the pioneer free tax software in Canada, and it has been helping Canadians file their taxes since 2004.
It is not a cloud-based application though. It is available for download on Windows, Mac, iOS and Android. If you are concerned about the security of your personal data with one of the online applications, then StudioTax could be a more secure option for you.
There is no need to create an account, or provide your address, email or credit card information.
It is completely free to use, but donations are welcome if you enjoyed the service and can afford it.
These are some of the other features of StudioTax:
- It is NETFILE certified
- There are no income restrictions
- You can file up to 20 tax returns
- It is available in Quebec, but not on the Mac version
- It can be used for both simple and more complex returns, such as self-employed, rental income, investment income and so on
Support is available through email and How to Guides in the application.
GenuTax is a free tax software that can handle most tax situations, such as capital gains and losses, rental income and small businesses.
It is NETFILE-certified and also includes:
- Multiyear support, that is you can also file taxes for any year starting from 2010
- Step-by-step interview to guide you through preparing your tax and claiming all relevant tax deduction and credit
- Up to 20 tax returns for each year with no income restrictions
GenuTax is completely free to use, but users are encouraged to donate a token to cover some of the costs of developing and maintaining the software.
A big con: GenuTax is a desktop application and it is only available on Windows Operating Systems (Windows 7 and above). So you’re out of luck if you use a Macbook. Also, it is not available for Quebec Provincial tax returns.
There is no phone support. But there’s limited support via email – responses can take up to two business days.
The final free tax software we’ll be covering is EachTax. EachTax has both a paid and free pricing option. For the paid version, it is $6.99 for a first tax return or $3.99 for each additional return. The free option is available to tax filers in the categories below:
- New Customers
- Seniors, 70 years and older
- New Immigrants
- Income of $25,000 or less (based on Line 15000 of the T1 return)
There is no income cap for the first 3 categories.
EachTax can be used for both simple and complex tax returns and has most of the standard features, such as Autofill, built-in error checking, secure online filing and ReFile of amended returns.
Unfortunately, the service isn’t available in Quebec or for returns that incorporate AgriStability/AgriInvest Program (T1163, T1273).
Also, the interface looks a little dated, but it gets the job done.
Free Tax Clinics
Another option for filing taxes for free is through one of the many tax clinics across Canada. They are staffed by volunteers and hosted by community organizations, under the CRA’s Community Volunteer Income Tax Program (CVITP).
Depending on the tax clinic, you may be able to simply walk-in or book an appointment to meet a volunteer. Others will allow you to drop off your documents and pick them up after your tax return is completed.
Click here to find a tax clinic in your area.
Due to covid-19, some community organizations are now hosting virtual tax clinics too. The returns will be completed and filed via phone or teleconference.
However, the tax clinics are not for everyone. To be eligible, you must have a simple tax situation and a modest income.
You have a simple tax situation if you have no income or your income is from employment, pension, RRSP, interest under $1,000 and benefits. You can’t use a tax clinic if you are self-employed, have capital gains or losses, business or rental income and so on.
Modest income varies depending on family size. For example, it is $35,000 for a single or $52,500 for a family of 5.
To learn more about what qualifies as simple tax situation and the income requirement for each family size, check the CRA’s Tax Clinic page here.
Should You File Your Own Tax Yourself Or Use A Tax Professional?
The short answer is: It depends. You should consider your own individual situation – how complicated your tax situation is, have you had a major life change in the past year and so on.
If you have self-employment income, rental income, investment income and many other tax areas that can be more complicated, it may be best to use the services of a professional.
Using a tax professional will be more expensive but it can potentially save you more in the future. Besides, the value of a CPA or other tax professional goes beyond just preparing your tax.
They can also help you with tax planning, choosing the right investment accounts, maximizing your benefits and so on.
What To Look Out For When Choosing A Tax Software?
So if you decide to go with one of the free options, what are the features to look our for?
- The software should be NETFILE certified.
- It is available in your province and supports your language.
- Easy to use and available on your device
- The version you’re using supports your tax situation. For example, some free versions may not support self-employment or rental income. So always check that there are no restrictions that may affect you
- The level of support provided
Tax Filing Deadline 2021
The deadline for filing your taxes for the 2020 tax year is April 30, 2021. You have till June 15, 2021 to file if you, or your spouse, are self-employed.
But you must pay any taxes owing by April 30, 2021.
You should start receiving your tax slips (T4, T5 and so on) starting in January. If you wish to file your taxes early to receive your tax refunds as soon as possible, you can file as early as February 22, 2021.
If you’re signed up for direct deposit with CRA, you can expect to get your refund within 2 weeks.
Check here to download a Free Tax Checklist to help you stay organized.
Related Post: 5 ways to reduce your tax
If you have a simple tax situation and you’re pretty sure you know what you’re doing, then SimpleTax is a great option. It can handle both simple and more complicated tax situations. And with its pay-what-you-want model, you can get everything for free or choose to donate when you’re done.
On the other hand, if you believe your tax situation is a little more complex or you may need some help, then we highly recommend TurboTax. It is a highly regarded tax software, easy to use and suitable for both beginners and more seasoned tax filers.
Yes, there are several options available to you, from free tax software to Free Tax clinics.
NETFILE is the electronic tax filing service from CRA. It allows individuals to file their own taxes directly to CRA using a certified software.
It depends on the filing method. If you filed electronically and you’ve setup direct deposit, you should get your refund within 2 weeks. It could take up to 8 weeks with paper returns.
Yes, you can file your tax to CRA using one of the approved tax software as a first-time tax filer.
Auto-fill my return lets individuals or an authorized representative, using any of the CRA certified tax software, to automatically fill parts of their return. Using the service, the tax software can securely pull in any information that CRA already has at the time of filing, e.g. a T4.
Whether you choose to file your taxes yourself or use a professional, there are many options available for you. So go ahead and choose one of the free tax software in Canada above.