CRA is set to introduce its online system for organizations applying for charitable status. Once this system is available on June 1, 2019, paper applications will no longer be accepted and organizations will only be able to apply for charitable status online using CHAMP. We suggest that if you are currently working on a charity application it may be best to complete it and file the application with CRA before May 31 to avoid having to re-input all the information on the T2050 form into the online system and potentially avoid any initial delays or issues associated with the new system.
In order to access the new system, applicants will have to have a MyBusiness account. If you already have an individual account with CRA for your personal income taxes, you will be able to use that login information for your MyBusiness account. If you do not, you can directly sign up for a MyBusiness account. To do so, you will need to use your personal Social Insurance Number (SIN). In order to set up a MyBusiness account, your corporation will have to be already incorporated, as you will need to use your business number.
This new system is meant to streamline the application process and any communications with CRA on the application process. It is also designed to reduce the paper waste associated with mailed and faxed applications. Applicants will also be able to respond to any CRA questions on their applications via the portal.
However, as is the case with most new computer systems and portals, we suspect that there will be glitches in the system and that it may be slow to begin. Charity applicants will also have to account for the time to set up a MyBusiness account.
It is our understanding that there will not be any major changes to the T2050 – Application to Register a Charity Under the Income Tax Act. CRA has been doing some minor tweaks to the form in the past few months to prepare for this switch to the online system.
CHAMP and T3010 - Annual Return
The new system will also allow registered charities to submit their T3010 filing online. As with the charity application, users must first sign up for a MyBusiness account before accessing this service. Unlike the charity application, the online T3010 filing is not mandatory and charities will still be able to complete and submit their T3010 filings online.
Through CHAMP, the T3010 will be online form which will not let you proceed to the next section until the previous section has been completed. And certain features may help remind charities to complete all relevant sections and schedules to the form, as well as to attach related documents, such as the T1235 and the charities financial statements.
You can find out more about the CHAMP initiative at the CRA website.
Blumberg Segal LLP has helped many organizations gain charitable status and can work with organizations to complete their charity applications. We also review T3010 documents from a legal perspective.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.