CRA Extends Tax Filing Deadlines in 2025 – Are You Eligible?

Canada Revenue Agency (CRA) has announced several important deadline extensions for the 2025 tax filing season. These changes come after months of confusion surrounding the capital gains inclusion rate. The federal government originally planned to increase this rate, but later decided to delay the change until January 1, 2026. This back and forth has left many taxpayers and tax professionals uncertain about how to proceed.

The Background: Why These Extensions Are Happening

In 2024, the federal government announced plans to increase the capital gains inclusion rate. This created a flurry of activity as investors and businesses tried to adapt. Then, the government changed course and pushed the implementation date to January 1, 2026.

This policy shift created several challenges:

• Many tax forms and software programs were being updated for the new rules
• Taxpayers had already made financial decisions based on the expected changes
• Tax professionals faced uncertainty about how to properly advise their clients
• The CRA itself needed time to adjust its systems and guidance

Recognizing these difficulties, the CRA decided to offer relief in the form of extended deadlines and penalty waivers. These measures aim to give everyone more time to understand the current rules and file their taxes correctly.

Personal Tax Returns: Extended Deadlines Explained

For individual taxpayers (those who file T1 returns), the normal deadline remains April 30, 2025. If you or your spouse runs a business, your normal deadline is June 16, 2025. However, the CRA has announced that “impacted T1 Individual filers” now have until June 2, 2025 to file without facing any late penalties or interest charges. Who counts as an “impacted T1 Individual filer”? The CRA hasn’t provided a crystal-clear definition, but the general understanding is that this includes:

• People who need to report capital gains or losses on their 2024 tax returns
• Individuals who sold investments, property, or other capital assets during 2024
• Those directly affected by the uncertainty around the capital gains inclusion rate

What remains unclear is whether this relief extends to:

• Spouses of people with capital gains, if the spouse doesn’t have capital gains themselves
• Individuals who file joint returns with someone who has capital gains
• People who might have had capital gains but chose to delay selling assets due to the rule changes

The CRA’s decision to extend the deadline to June 2, 2025 gives affected taxpayers an extra month to prepare their returns. This is particularly helpful for those who might have been waiting for clearer guidance or updated tax software.

Trust Returns: Special Considerations and Extensions

Trusts face their own set of challenges when reporting capital gains. The CRA has recognized this by providing special relief for “impacted T3 Trust filers.” Normally, trusts must file their returns (T3) within 90 days after their year-end. For example, a trust with a December 31, 2024 year-end would normally need to file by March 31, 2025. Under the new relief measures, impacted trusts can file as late as May 1, 2025 without facing penalties or interest. This applies to:

• Trusts that need to report dispositions of capital property that occurred after June 24, 2024, and before January 1, 2025
• Trusts with fiscal periods ending between January 1 and January 31, 2025 that need to report dispositions

The CRA has specifically clarified that “impacted T3 Trust filers” includes 2025 T3 tax returns where there’s a disposition to report and the trust has a fiscal period ending between January 1 and January 31, 2025. This relief is significant for trust administrators and beneficiaries who rely on accurate and timely trust filings. The extension allows trustees more time to consult with tax professionals and ensure they’re applying the correct inclusion rate to capital gains.

Information Slip Extensions: Critical Dates for Employers and Financial Institutions

Many businesses and financial institutions must issue information slips to taxpayers and the CRA. These slips report various types of income and are essential for individuals to complete their tax returns accurately. The CRA has recognized that some organizations face “ongoing challenges” with preparing these slips, particularly those that involve reporting capital transactions. As a result, they’ve announced penalty relief for several types of information slips:

Slip Type	Description	Normal Deadline	Extended Deadline (No Penalties)
T4 Slips	Reports salary, wages, and taxable benefits paid to employees.	February 28, 2025	March 7, 2025
T4A Slips	Reports pension payments, retirement benefits, and various other types of income.	February 28, 2025	March 7, 2025
T5 Slips	Reports interest, dividends, and other investment income.	February 28, 2025	March 7, 2025
T4PS Slips	Reports amounts paid out from profit-sharing plans.	February 28, 2025	March 17, 2025
T5008 Slips	Reports securities transactions relevant to capital gains reporting.	February 28, 2025	March 17, 2025
T3 Slips	Reports income allocations and distributions from trusts to beneficiaries.	90 days after trust’s year-end	May 1, 2025 (for “impacted T3 Trust filers”)

It’s worth noting that the T5008 slips, which report securities transactions, get a longer extension (until March 17) compared to the more standard T4 and T5 slips (March 7). This likely reflects the additional complexity involved in properly reporting securities transactions given the uncertainty around capital gains rules.

Important Warning About Late Filing

The CRA has included an important caution in their announcements: If you file after the extended relief period, penalties will be calculated based on the original due date, not the extended date.

For example:

• If T4 slips are normally due February 28, and the relief period extends to March 7
• But you file on March 8 (just one day after the relief period)
• The CRA will consider the filing to be 8 days late (counting from February 28), not just 1 day late

This means the penalties could be much higher than expected for those who miss the extended deadline, even by a small margin. The CRA calculates late-filing penalties for information returns based on the number of slips and how late they are filed, with penalties increasing significantly for longer delays.

Corporate Tax Returns: A Confusing Situation

The situation for corporations is less clear and somewhat contradictory. Initially, in November 2024, the CRA announced relief for corporations with filing deadlines on or before March 3, 2025. This was intended to give corporations time to adapt to new forms that were expected to be published on January 31, 2025.

However, more recently, the CRA made a statement to CPA Canada saying:

“As the capital gains rate change is now proposed to be effective January 1, 2026, corporations can continue to use existing forms and tax software to file using the one-half inclusion rate until further notice. Penalty and interest relief was originally announced for those corporations with a filing due date on or before March 3, 2025, to allow time for corporations to work through the new forms which were expected to be published on January 31, 2025. As forms for the T2 Corporation Income Tax Return related to the capital gains inclusion rate are not being revised at this time, there is no longer a basis for providing relief.”

This statement has created confusion. Does it mean:

• The originally announced relief has been completely cancelled?
• The relief still applies to filings due before January 31, 2025, but not after?
• Corporations should proceed as normal with the current half inclusion rate?

CPA Canada has requested clarification from the CRA on these points, but as of February 26, 2025, no definitive answer has been provided.

For now, it appears that corporations should:

• Continue using existing forms and software
• Apply the current half inclusion rate to capital gains
• Not expect any special relief or extensions for filing deadlines

Corporate tax professionals should keep an eye out for further clarifications from the CRA on this matter.

Questions That Still Need Answers

Despite the CRA’s announcements, several important questions remain unanswered. CPA Canada has reached out to the CRA seeking clarity on these issues:

For Individual Taxpayers:

• Does the relief for “impacted T1 Individual filers” extend to their spouses, even if the spouse has no capital gains to report?
• What about individuals who file jointly with someone who has capital gains?
• Do taxpayers need to specifically request this relief, or is it automatically applied?

For Related Forms:

• Does the deadline extension also apply to related forms like the T1135 (Foreign Income Verification Statement)?
• What about other prescribed forms that accompany T1 or T3 filings?
• Are there any special provisions for forms related to international taxation?

For Corporate Filers:

• Has the previously announced relief for corporations been completely rescinded?
• Does any relief apply to corporate filings due before a specific date?
• What should corporations do if they delayed filing in anticipation of relief that may no longer apply?

The CRA has promised to provide more information as it becomes available. Tax professionals and taxpayers should stay alert for updates that might clarify these outstanding questions.

What These Changes Mean for Canadian Taxpayers

If you’re a Canadian taxpayer trying to make sense of all these changes, here’s what you need to know:

If You Have Capital Gains to Report:

• You have until June 2, 2025 to file your personal tax return without penalties or interest
• The capital gains inclusion rate remains at 50% (one-half) for the 2024 tax year
• You should report your capital gains as you normally would, using current forms and software

If You’re a Trust Administrator:

• If your trust had capital property dispositions after June 24, 2024, you have until May 1, 2025 to file
• Continue using the current half inclusion rate for capital gains
• Make sure to inform beneficiaries about any potential delays in receiving their T3 slips

If You Issue Information Slips:

• You have extra time to file various information slips without penalties
• Make sure to file within the extended relief period to avoid significant penalties
• Remember that T5008 slips (for securities transactions) have a longer extension (March 17) than T4 and T5 slips (March 7)

If You’re a Corporation:

• Continue using existing forms and the current half inclusion rate
• Don’t count on any special relief or extensions
• Watch for further clarifications from the CRA about previously announced relief

General Advice for All Taxpayers:

• File as early as you can, even with the extensions
• Keep good records of all your transactions, especially capital property dispositions
• Consider consulting with a tax professional if you have complex capital gains situations
• Stay informed about any further announcements from the CRA

Looking Ahead: What Comes Next

The capital gains inclusion rate is still scheduled to increase on January 1, 2026. This means that for the 2026 tax year and beyond, a larger portion of capital gains will be subject to taxation. The CRA will likely begin updating forms and systems in advance to avoid the confusion that occurred this year. Taxpayers should:

• Start planning now for the increased inclusion rate in 2026
• Consider the timing of major asset sales that might result in capital gains
• Stay informed about any further changes to implementation dates or details
• Consult with financial advisors about strategies to manage the impact of the increased rate

While the current relief measures help address immediate concerns, they’re only temporary solutions. The long-term implications of the capital gains inclusion rate increase will require careful planning and consideration.