What Are Automatic Federal Benefits & Pre-Filled Returns?
Budget 2025 proposes a system where the Canada Revenue Agency (CRA) would have the authority to file tax returns on behalf of eligible low-income individuals (not trusts), to ensure that they receive benefits like the GST/HST Credit, Canada Child Benefit, Canada Workers Benefit, and Canada Disability Benefit—even if they don’t file tax returns themselves. (budget.canada.ca)
This measure would apply starting for the 2025 taxation year (filing in 2026), with benefits beginning for the 2026 tax year, reaching up to 5.5 million low-income Canadians by 2028. (budget.canada.ca)
Who Is Eligible?
Individuals qualify for CRA-filed returns if all of the following are met:
- Their taxable income is less than the federal basic personal amount (plus age/disability amounts where applicable).
- All their income comes from sources for which information returns have already been filed with CRA.
- They haven’t filed a return in the past year despite eligibility, or haven’t filed in the preceding three years.
- They haven’t filed for the current taxation year by 90 days after the filing deadline.
- Other criteria as determined by the Minister of National Revenue. (budget.canada.ca)
The CRA must send the individual a review-and-confirm draft return. If no changes are made within 90 days, the CRA could file it. The individual can opt out. (budget.canada.ca)
Compliance Considerations & Action Items
For Low-Income Individuals
- Track filing history: If you’ve not filed when required, you could be eligible. But make sure you haven’t overlooked deadlines or benefits.
- Check source income records: Make sure employer, bank, or other payers send their source income reports to CRA. Without that, CRA may lack data to auto-file.
- Review pre-filled drafts carefully—CRA provides draft info, but you still may need to correct omissions or errors.
For Tax Professionals & Advisors
- Educate clients about rights to opt-out.
- Assist clients in gathering documentation (income statements, receipts) even if they don’t usually file.
- Monitor how CRA implements the program—watch for guidance, forms, and penalty/appeal processes.
Administrative Impacts
- CRA will need new processes for contacting individuals, tracking non-filers, and dealing with incomplete info.
- Individuals must expect notices of assessment, benefit entitlement with or without traditional filing.
Practical Example
Alex is 60 years old, had no employment income in 2025 but earned some modest investment income and receives the Disability Tax Credit. He didn’t file a tax return last year because he thought nothing was owed. Under the new rules, CRA will send Alex a pre-filled return with all info they have (investment income, age/disability amounts). If Alex doesn’t respond within 90 days, CRA files on his behalf, and he gets his GST credit and Canada Disability Benefit.
Key Takeaways for Compliance
- Keep records even if you didn’t think you need to file.
- Opting out is an option—but if you are eligible, auto-filing may help you receive benefits sooner.
- Stay alert for CRA notices and confirm your information is correct.
- Legal appeal rights remain—even for CRA-filed returns.
This measure aims to close the gap where benefits are missed because people don’t file—but making it work requires both CRA integrity and taxpayer engagement.