About filing a T3 return
Filing a T3 Trust Return occurs only via paper filing. The “Slips Summary” is eligible for EFILE with slips.
The CRA “T3 Return” guide details where a T3 return can be filed:
The CRA “T3 Trust Guide” provides information on how to complete the T3 Trust Income Tax and Information Return, the T3 slip, Statement of Trust Income Allocations and Designations, and the T3 Summary, Summary of Trust Income Allocations and Designations.
Paper file a T3 return in ProFile
ProFile transfers information from the T3 Schedules, slips, and forms to the T3 Trust Return Jacket. The final page of the jacket requires a signature from a trustee, executor or administrator for the trust.
Other forms you may need to file if they are used include:
- T3A: Request for loss carryback by a trust
- T1013: Consent form
- T1135: Foreign income verification statement
- T1141: Information return in respect of transfers or loans to a non-resident trust
- T2223: Election, under subsection 159(6.1) of the Income Tax Act, by a trust to defer payment of income tax
- TX19: Asking for a clearance certificate
- Election: Election to tax income in the trust
About XML filing of a T3 return in ProFile
Preparers using ProFile release 2017.2.5 and later can transmit eligible Trust Returns using the Canada Revenue Service’s (CRA) Internet file transfer service.
How does the XML filing for a T3 return work?
Transmitting an XML file electronically to the CRA is different from the EFILE process.
An XML generates based on the information provided on the T3 return; this XML file transmits to the CRA via ProFile.
The CRA issues a confirmation number following submission to confirm the receipt of the XML file.
The preparer inserts the CRA confirmation number on the T3 return.
What are the requirements for the XML filing of a T3 return?
The CRA maintains a detailed list of restrictions for filing a T3 return electronically.
Please review the list prior to undertaking an XML filing.
What tax years are eligible for the XML filing of a T3 return?
XML filing for T3 returns occurs for 2017 and onwards. A T3 return undergoing XML filing cannot have a year-end date prior to January 1, 2017.
Preparing a T3 return for XML filing
- Open ProFile; ensure you are using version 2017.2.5 or later.
- Prepare the T3 return.
- Resolve any error messages displayed under the “MagMedia” tab of the Active Auditor (see section “Managing Errors in the T3 Return” below).
If the information on the return is complete, valid, and eligible for the Internet file transfer service, the “Internet file this return?” question in the return’s “Filing” section checks automatically:
Note: if the return is not valid, the question remains unchecked and prevents the XML file from transmitting. See section “Using the T3 EFILE” below for resolution.
Using the T3 EFILE worksheet
T3 EFILE is a worksheet used to track exclusions stemming from the T3 return.
T3 EFILE automatically calculates eligibility and populates (using “YES”/”NO” values) based on the return information. It displays all unmet criteria for XML filing the T3 return:
Any criteria for XML filing not being met prevents the “Internet file this return?” question in the return’s “Filing” section from activating.
Preparers should review the T3 EFILE worksheet prior to undergoing XML filing and address any unmet criteria prior to filing.
XML filing a T3 return
1. Open the populated T3 return.
2. Select the “Transmit T3 Return” option from the “EFILE” drop-down menu in the top toolbar; the “Transmit T3 Return” window displays.
3. Select return type (for example, “T3 Return”):
4. Click the “OK” button; the XML file builds:
If successful, a message indicating the processing and completion of the XML build displays.
5. Click “OK”.
ProFile automatically opens the CRA transmission window:
6. Enter the preparer account number and Web access code when prompted.
7. Click the “Next” button; the “Internet file transfer – attach your return” window displays.
Note: the XML file path already populates in the directory field. To search for a different XML file, click the “Browse” button.
8. Click the “Submit” button; the XML file transmits to the CRA.
The CRA provides a confirmation number following transmission.
Manually enter the confirmation number in “Confirmation Number” field of the T3 return’s “Filing” section:
9. Save the return.
Filing T3 slips via EFILE
A T3 Trust return must still undergo paper filing. However, the “Slips Summary” can undergo EFILE with the related slips.
Note: always print or retain a PDF copy of the CRA confirmation of an EFILE when completed. ProFile does not retain a report or record of which slips are transmitted.
1. Prepare the T3 slip in ProFile.
2. Open the “Beneficiary details” form and select the “Type of slip” being transmitted:
3. Select the “Transmit” option under the “EFILE” drop-down menu in the top toolbar.
4. Select the appropriate option under the “Data type” drop-down menu and click the “OK” button:
ProFile builds the XML file and automatically launches the CRA transmission window.
5. Review the CRA disclaimer, login, and submit the .xml file.
6. Click on the “print” icon on the browser window to print the confirmation number.
7. Click the “Close” button.
Early Filing Next Year for T3 in ProFile
The next year’s T3 module in ProFile is not available until the year after: for example, when the 2018 T3 module is the last one released and you need to prepare a T3 return with 2019 year-end, the 2019 T3 module is not available until January of 2019. In this situation, the previous year’s T3 module is used for preparing next year’s T3 return.
New tax rate implementation
New tax rates are implemented in the previous year’s T3 module to handle preparation of next year’s T3 returns. Entering the appropriate year-end on the “Info” page initiates the applicable tax rates for that year. T3 returns filed using the previous year’s tax forms are acceptable to CRA, and they will reassess the return if required.
Preparing next year’s T3 return using the previous year’s T3 module
- Save a duplicate copy of the previous year’s T3 return to be used as the next year’s T3 return.
- Open the previous year-end T3 return in ProFile.
- Enter the appropriate year-end for the trust return T3 to be prepared; this initiates the applicable tax rates for next year.
- Delete the information pertaining to the previous year-end, keeping what is required for the next year-end.
- Enter the T3 data required for filing the next year’s trust return, allocate income to beneficiaries, and create the T3 slips.
- Print the T3 trust return using “File” -> “Print” and print T3 slips using “File” -> “Print Slips”.
- Save the T3 trust return with a different file name to identify the tax rates for that year.