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File a T3 return

About filing a T3 return

Until 2017, T3s were required to be paper filed, though slips and the summary could be transmitted by XML. starting with 2017 year ends, the T3 could be filed by way of XML filing. Starting in version 2021.3, preparers will be able to to electronically file T3's with their regular EFILE credentials.

Available resources

The CRA "Where to file a 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.

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

T3Efile is a worksheet used to track exclusions stemming from the T3 return.

T3Efile 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:

L0bUJRHRv_2.JPG

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 T3Efile worksheet prior to undergoing XML filing and address any unmet criteria prior to filing.

A T3 Trust return must still undergo paper filing. However, the Slips Summary can undergo XML filing 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:

L0bUJRHRv_7.JPG

3. Select the Transmit option under the EFILE dropdown menu in the top toolbar.

4. Select the appropriate option under the Data type dropdown menu and select the OK button:

Slip filing.png

In older modules the interface will appear like this:

L0bUJRHRv_8.JPG

ProFile builds the XML file and automatically launches the CRA transmission window.

5. Review the CRA disclaimer, login, and submit the .xml file.

6. Select the print icon on the browser window to print the confirmation number.

7. Select the Close button.

A T3 Trust return must still undergo paper filing. However, the Slips Summary can undergo XML filing 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:

L0bUJRHRv_7.JPG

3. Select the Transmit option under the EFILE dropdown menu in the top toolbar.

4. Select the appropriate option under the Data type dropdown menu and select the OK button:

Slip filing.png

ProFile builds the XML file and automatically launches the CRA transmission window.

2022-01-24_16-33-17.png

T3slips disclaimer en.png

5. Locate the XML in the designated folder or click Copy to Clipboard to copy the XML location to the clipboard.

6. Review the CRA disclaimer and click the I agree button for consent to transmit the XML.

I agree T3.png

7. Enter the Account number, Web access code and click Next. The XML transmits to CRA.

Note: due to changes in CRA requirements, the account number must be manually entered. It can be copied from the Trust account number line on the Info page.

t3 transfer xml.png

8. Select the print icon on the browser window to print the confirmation number.

9. Select the Close button.

Beginning with the release of 2021.3.0, returns with a year end of 2021 or later will be able to be e-filed using CRA EFILE credentials. Returns are still required to not have any exclusions on the T3Efile worksheet.

T3EFILE.png

A newer section on the Info page under Filing will default to Yes if a T3 is eligible for EFILE and No if not.

T3 new info section.png

Slips and summaries must still be transmitted via XML filing.

To EFILE the return, select EFILE in the menu bar and then Transmit T3 return.

T3 transmit en.png

The Interface will appear like this. Select the type of T3 you are filing and click Next:

t3efileinterface.png

If your T3 file has EFILE errors you'll see a rejection box outlining what needs to be corrected.

t3efilefail.png

Returns are submitted to CRA in JSON format. The JSON along with the acceptance or rejection message will be stored in the folder selected in the T3 Efile -> Options directory.

t3 efile options.png

The confirmation number will appear on the Info page if successfully transmitted.

T3 confirmations en.png

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

  1. Save a duplicate copy of the previous year’s T3 return to be used as the next year’s T3 return.
  2. Open the previous year-end T3 return in ProFile.
  3. Enter the appropriate year-end for the trust return T3 to be prepared; this initiates the applicable tax rates for next year.
  4. Delete the information pertaining to the previous year-end, keeping what is required for the next year-end.
  5. Enter the T3 data required for filing the next year’s trust return, allocate income to beneficiaries, and create the T3 slips.
  6. Print the T3 trust return using File -> Print and print T3 slips using File -> Print Slips.
  7. Save the T3 trust return with a different file name to identify the tax rates for that year.

Beginning in version 2021.3.0, T3RCA (Retirement Compensation Agreement) and T3M (Environmental Trust) returns can be e-filed in ProFile. When selecting Transmit T3 return from the EFILE menu, the option for T3M or T3RCA is available. t3efileinterface.png

In both cases the box indicating you're looking to electronically file, must be selected. t3mefile.png

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 2017–2020. Returns completed in 2021 and later modules should be e-filed using an EFILE ID and password. T3 slips for 2021 and later can still be filed through XML. A T3 return undergoing XML filing cannot have a year-end date prior to January 1, 2017.

  1. Open ProFile; ensure you are using version 2017.2.5 or later.
  2. Prepare the T3 return (only 2020 module and earlier are eligible for XML filing).
  3. Resolve any error messages displayed under the Mag Media tab of the Active Auditor.

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:

L0bUJRHRv_1.JPG

Note: if the return is not valid, the question remains unchecked and prevents the XML file from transmitting. Check the form T3Efile for possible exclusions as well as Mag Media tab of the auditor for errors.

1. Open the populated T3 return.

2. Select the Transmit T3 Return option from the EFILE dropdown menu in the top toolbar; the Transmit T3 Return window displays.

3. Select return type (for example, "T3 Return"):

L0bUJRHRv_3.JPG

4. Select the OK button; the XML file builds.

L0bUJRHRv_4.JPG

If successful, a message indicating the processing and completion of the XML build displays.

5. Select OK.

ProFile automatically opens the CRA transmission window:

L0bUJRHRv_5.JPG

6. Enter the preparer account number and Web access code when prompted.

7. Select 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, select the Browse button.

8. Select 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:

L0bUJRHRv_6.JPG

9. Save the return.

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