What do I need to know about NETFILE?

March 4, 2021

There’s not much we don’t do online, and the Canada Revenue Agency (CRA) has gone digital too. Here’s what you should know about NETFILE, the CRA’s electronic tax-filing service.

What is NETFILE?

NETFILE is the online filing system that allows you to send your tax return directly to the CRA. It allows you to submit your return securely and easily over the Internet using a NETFILE-certified software product (like H&R Block’s Do It Yourself Tax Software).

Millions of Canadians NETFILE their returns. It’s fast, easy, and secure. But there are some situations where NETFILE might not be an option for you. Here are the most common reasons:

Bankruptcy:

If you’ve ever declared bankruptcy, you’ll need to file a paper return, and won’t be able to use NETFILE.

Non-residents:

Living across the ocean or even just south of the border? If you aren’t a Canadian resident, you can’t use NETFILE. If you have income from a business established outside your province or territory of residence, you also won’t be able to NETFILE your return.

Employment income outside of Canada:

If you’re paid by an international organization, like the United Nations, you can’t file your return electronically and will need to mail it in.

Children:

If you’re claiming more than 22 dependants, you can’t NETFILE your return.

Previous returns:

This year, NETFILE only accepts 2017, 2018, 2019, and 2020 tax returns. If you’re trying to catch up on any earlier returns, you’ll need to mail them in.

There are a few other restrictions when it comes to using NETFILE and some are based on the provincial credits being claimed. Check your eligibility for NETFILE on the federal government website before deciding how to file.

Why should I use NETFILE?

Choosing to NETFILE your return is a good idea for several reasons.

Highly secure and confidential:

During the NETFILE process, the CRA takes significant precautions to ensure your data remains secure.

Quicker refunds:

When you NETFILE, your return is processed much faster than a paper return. In many cases, you can get your refund in as few as 8 business days.

More accurate:

Since a CRA representative won’t need to re-enter your information, there’s less chance of an error being made in your return.

Keep your slips at home:

When you NETFILE your return, you won’t need to mail in any of your slips or supporting documents unless the CRA specifically asks to see them.

Immediate confirmation:

Once you NETFILE your return, the CRA will send you a confirmation that it’s been received, usually within a few seconds. We recommend that you keep the confirmation number for your records.

Can I NETFILE my Québec return?

Yes! Canadian residents filing a Québec return can also take advantage of the NetFile Québec service. Like NETFILE, NetFile Québec provides a safe and secure platform through which taxpayers can submit their return to the government. As you might expect, the advantages of using NetFile Québec mirror those offered by the CRA service, offering users a much quicker processing time, immediate confirmation of receipt, and a higher degree of accuracy.

What’s the NETFILE Access Code (NAC?)

Beginning in 2020, you can enter your NETFILE Access Code (NAC) when you file your federal return online. This is an 8-character code that’s used as an added security measure to verify your identity.

Entering your NAC isn’t mandatory; you’ll still be able to NETFILE without it. However, if you don’t enter it, you won’t be able to use any information from your 2020 tax return to confirm your identity with the CRA in the future (for example, if you need to call the CRA, or sign up for your CRA My Account). You’ll need to use other information to authenticate your identity.

You don’t need your NAC to file Québec returns. The NAC also doesn’t apply to you if you’re filing your tax return for the first time.

You’ll find your NAC on the right side of your notice of assessment (NOA) from the previous tax year. On the paper version of your NOA, the NAC can be found on the right side under Date issued.

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If you’re viewing your NOA in your CRA My Account or using the Express NOA service in H&R Block’s Do It Yourself Tax Software, your NAC is labelled Access code and can be found under the Notice details box.

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I NETFILE’d my return, what happens next?

After you’ve received the confirmation number, the CRA might contact you for clarification or to verify some information. Otherwise, the CRA will issue your NOA once your return is processed. If you’re registered for My Account, you can find out the status of your return there.

Keep in mind, if this is your first year filing a tax return, you won’t be able to use the services typically available through the CRA My Account service; this is because the CRA requires that you file at least one tax return before you can register.

How do I make changes to my NETFILE'd return?

To make any changes after you NETFILE your return, you have to wait for your NOA from the CRA. Once you receive your NOA, you can use the ReFile feature in H&R Block’s Do It Yourself Tax Software to adjust and re-file a return you filed via NETFILE. You can also change a filed return through the CRA’s My Account (if you’re registered).

If you don’t have access to My Account or don’t want to use the ReFile feature, you'll need to complete and file form T1 Adjustment Request or submit a signed letter with details of the changes you are requesting (including year of return to be changed, social insurance number, address, and phone number). You must mail all supporting documents for the change to your tax centre, including those for the original assessment, unless already sent.

Keep in mind, online changes to your return usually take 2 weeks and mailed change requests can take much longer.

Ready to make the switch to NETFILE, but not sure where to start? Get help from the largest network of reliable Tax Experts by choosing one of four convenient ways to file: File in an Office, Drop-off at an Office, Remote Tax Expert, or Do It Yourself Tax Software.

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