Filing your annual income tax return is a critical obligation for Canadian residents, and the Canada Revenue Agency (CRA) provides multiple methods to do so. Whether you’re comfortable with digital platforms or prefer traditional paper filing, understanding the differences between both options can help you make an informed choice. This guide compares filing a tax return by paper and online in Canada, with insights on processes, timelines, and key considerations.
1. Overview of Tax Filing in Canada
Every individual who earns taxable income in Canada is required to file a tax return, typically using the T1 General Income Tax and Benefit Return. The deadline for most individuals is April 30 each year, while self-employed individuals have until June 15 (though payment is still due by April 30).
There are two main ways to file your tax return:
- Online Filing: Using CRA-certified NETFILE software or through a tax preparer using EFILE.
- Paper Filing: Completing a physical tax return and mailing it to the CRA.
2. Filing Your Return Online
a) NETFILE: What It Is and How It Works
NETFILE is the CRA’s electronic tax filing service for individuals. It allows you to submit your return directly from certified software to the CRA without mailing physical forms.
Steps to File Online:
- Choose a CRA-certified NETFILE software product (e.g., TurboTax, Wealthsimple Tax, UFile).
- Enter your personal and tax information into the software.
- The software validates the information and offers instant tax calculations.
- Transmit the return to the CRA directly through NETFILE.
- Receive confirmation and download your Notice of Assessment online.
b) Advantages of Online Filing
- Faster processing—most refunds are issued within 8–10 business days.
- Convenient and user-friendly, especially with CRA Auto-fill My Return feature.
- Minimized risk of errors due to software validation checks.
- Environmentally friendly—no need to print or mail forms.
- Receive Notice of Assessment faster through CRA My Account.
c) CRA My Account Integration
Filing online gives you access to additional CRA services via CRA My Account, including viewing your refund status, contribution limits, and past returns.
d) EFILE: For Tax Professionals
If you hire a tax preparer, they will likely file using EFILE—a CRA system similar to NETFILE but intended for professionals. You still benefit from fast processing and electronic tracking.
3. Filing Your Return by Paper
a) How to File a Paper Return
You can request a paper tax package from CRA or print the forms online. The standard return is the T1 General Form, along with additional schedules and slips depending on your income and deductions.
Steps to File on Paper:
- Download the T1 return and relevant schedules from the CRA website or wait for a mailed package.
- Fill in your personal details and calculate your income, deductions, and credits manually.
- Attach all necessary slips (e.g., T4, T5) and receipts.
- Mail the return to the designated CRA Tax Centre based on your province or territory.
- Wait for CRA to process your return and mail your Notice of Assessment.
b) Disadvantages of Paper Filing
- Processing takes significantly longer—8 to 12 weeks or more.
- Higher risk of human error in calculations and omitted forms.
- No access to Auto-fill or real-time validation.
- Requires postage, printing, and physically organizing documents.
c) When Paper Filing May Be Necessary
Some individuals may need to file by paper if:
- They are not eligible to use NETFILE (e.g., first-time filers without CRA access code).
- They don’t have access to a computer or internet connection.
- They prefer to do manual calculations and submissions.
4. Comparing Paper Filing vs. Online Filing
| Feature | Online Filing | Paper Filing |
|---|---|---|
| Processing Time | 8–10 business days | 8–12 weeks |
| Refund Speed | Fast (if using direct deposit) | Slower (especially with mailed cheque) |
| Error Detection | Built-in software validation | Manual error-prone |
| Environmental Impact | Low | High (paper, postage) |
| CRA Integration | Full (Auto-fill, My Account) | Limited |
| Cost | Free or low-cost software options | Free forms, cost of postage |
5. Tips for a Smooth Filing Experience
- Gather all necessary tax slips (T4, T5, RRSP, etc.) before starting.
- Use CRA’s Auto-fill feature through certified software to reduce input errors.
- Sign up for direct deposit to receive your refund faster.
- Double-check all calculations and ensure all required forms are attached.
- Keep copies of your return and supporting documents for at least 6 years.
6. Final Thoughts: Which Filing Method is Best for You?
Online filing offers speed, accuracy, and convenience, making it the preferred method for most Canadians. However, paper filing remains a valid option for those who lack digital access or are more comfortable with traditional processes. Ultimately, the best filing method depends on your personal preference, access to technology, and the complexity of your tax situation.
Whichever method you choose, ensure your return is filed accurately and on time to avoid penalties and to receive your refund without delay.
