A whopping 90% of Canadians who filed tax returns in 2020 did so by using electronic filling methods.
Of these, 32.7% used a tax software approved by the CRA for NETFILE, 57.1% used an EFILE service, and 0.2% of filers used File My Return.
Filing your income tax and benefit return using tax software is easy and you also get back any refunds faster. Compared to a traditional paper filing, your tax refund could be processed in as little as 2 weeks instead of 8 weeks or longer.
It’s no wonder that paper returns declined significantly from almost 5.4 million in 2015 to just over 3.6 million returns in the 2019 tax year.
As you prepare for the 2020 tax year season that opens up in February 2021, below are some of the best tax preparation software you can use for your filing.
Best Tax Return Software in Canada
Tax software in Canada that have been approved by the Canada Revenue Agency to transmit data using NETFILE generally offer the following benefits:
- Auto-fill my return
- 100% accuracy and maximum tax refund
- Express Notice of Assessment (NOA)
- Up to 20 returns per account
They also offer various features and benefits that may vary depending on whether you are using a free or paid version of the tax program.
TurboTax: Best Overall and for Live Support
Turbotax is the most popular tax software in Canada. It is CRA-approved to use the NETFILE service and also supports Auto-fill my Return.
TurboTax is available on multiple devices including Android and iPhone devices. It also offers a downloadable desktop program.
It breaks down the tax forms into small manageable bits and offers guidance along the way so you don’t miss out on over 400 tax deductions and credits, and can maximize your tax refund.
This tax software offers multiple products that cater to simple and complex tax situations including investment income, self-employment income, personal and business taxes.
If you’d rather have an expert do your taxes or want someone to review it before you submit it, you can use the TurboTax Live service.
Cost: Has a free version (TurboTax Free). The standard paid product is $19.99 and premium options are available.
Is it safe? TurboTax uses TLS encryption to protect your data.
Available: In all Canadian provinces and territories.
Pros of TurboTax
- It is CRA-approved for NETFILE
- Offers a free version for simple tax returns
- Can handle simple and complex returns including investment, rental and business income
- Access to live support
- Audit protection is available
Cons of TurboTax
- Support is limited for the free version
- Premium versions are more expensive
For more details about this tax preparation program, read our TurboTax review.
SimpleTax: Best For Free Tax Filing
SimpleTax is a free tax return software that uses a pay-what-you-can model.
Designed by Canadians, this platform was recently acquired by Wealthsimple, a popular online financial institution.
You can use SimpleTax in your web browser or download the mobile app.
It supports simple and complex returns including self-employment and rental income. A refund optimizer helps you to utilize all the deductions and tax credits applicable to your situation so you get the maximum refund possible.
If you have questions about your tax filing, you can get help by email.
Cost: SimpleTax is free. If you want, you can make a small payment after submitting your return to CRA.
Security: It uses encryption to secure your data. You can also enable 2-factor authentication to provide further protection.
Available in: All provinces and territories in Canada.
Pros of SimpleTax
- Free tax software for Canadians
- It supports simple and complicated tax situations
- User-friendly interface
- CRA-approved for NETFILE
Cons of SimpleTax
- No support for corporation tax filing
- Audit Assistance and personalised tax return by an expert is not available
- A downloadable Windows version is not available
- Does not support the AgriStability and AgriInvest programs for farmers
Want to know more about SimpleTax? Read our review.
H&R Block has been around on the tax filing scene since 1964. It offers an online tax software as well as tax services at more than 1,000 retail offices across Canada.
The online version has three tiers of service depending on the level of assistance you want: Free ($0), Assistance ($19.99), and Protection ($29.99).
You can also opt for add-on services including an expert review (starts at $59.99), audit protection, and a last will and testament.
Cost: There’s a free version and you can also choose from various paid products depending on your needs.
Available: In all provinces and territories in Canada.
Security: It uses several layers of security and policies to protect your data.
Pros of H&R Block
- CRA-certified to use NETFILE
- Offers support via chat and telephone
- Premium options including expert help and audit protection are available
- In-person tax service is available (drop off at an office)
Cons of H&R Block
- Support is limited for the free version
- Premium options are more expensive
- Does not support Form T1273, Form T1163 and Form T2203
This tax software is free to use. It works on Windows computers and you need to download and install the program to get started.
Similar to the other tax software on this list, you can use GenuTax to file for the 2020 tax years as well as previous years up to 2010.
It works for simple and complex taxes and can handle capital gains, rental property income, and small business taxes.
GenuTax does not support Form T2203 and Form T1135. Also, you won’t be able to use it if you are a participant of the AgriStability or AgriInvest programs, or when filing a pre-or post-bankruptcy claim.
For assistance or questions about your filing, you can send an email to [email protected].
Cost: Free. You can make a donation using PayPal or a credit card.
Security: Your tax information is stored on your local hard drive.
Available: Throughout Canada with restrictions in Quebec.
Pros of GenuTax
- It is certified by the CRA to use NETFILE
- Free tax preparation software
- Simple and user-friendly
Cons of GenuTax
- The limited support available via email can take up to two business days
- You can’t use it to file your Quebec provincial income tax return (federal filing available)
- Only available on the Windows operating system; no mobile or iOS versions
- It is missing a few forms
UFile has been serving Canadians for over 20 years.
It offers an online web-based version, a desktop installation file for Windows, and a free version for eligible filers.
UFile is easy to use and the step-by-step format is easy to follow even for first-time users.
The free UFile version is available to students, newcomers to Canada who are filing their first federal return, and taxpayers with a total family income of less than $20,000.
The software supports self-employment, investment, and rental property income.
Cost: UFile has a basic free option. UFile ONLINE starts at $19.95 and UFile Premium starts at $29.95.
Security: It uses 128-bit encryption to protect your data
Available: Throughout Canada
Pros of UFile
- CRA and NETFILE approved
- Access to email and telephone support
- Has a version for corporation T2 filing
- Has a basic free version for eligible individuals
Cons of UFile
- The free version is not open to all
- It does not support Form T1273 and bankruptcy returns
- Audit assistance is not provided
This Canadian-made tax software is newer and you can access it using your computer or smartphone.
CloudTax offers a free version for simple tax returns. A standard version costs $29/return if you have business, foreign or rental income; and the Plus version starts at $69 and supports Corporation T2 returns.
You can also have your taxes filed by an expert for an extra $29.
Available in: CloudTax Free is not available in Nunavut, Quebec, Yukon or the Northwest Territories.
Security: Your data is encrypted and only shared with the CRA using NETFILE.
Pros of CloudTax
- It is CRA-approved
- Audit protection is available as an add-on for $2.99 per month
- Free version available for simple tax returns
- User-friendly and intuitive platform
Cons of CloudTax
- The free version offers limited support and is not available throughout Canada
StudioTax is another online tax filing option available to Canadians.
To use the software, you will need to download the .exe file and install it on your Windows or Mac computer. You can also download the mobile app from the App Store and Google Play.
While the interface for StudioTax looks dated, it is well-rated by users. Note that it does not support some tax forms, including Form T1273 Statement A, Form T2203, TP-22, and TP-25.
You can access Youtube tutorials and the support section of the website if you have questions about your tax filing.
Cost: It has a $15 license fee. If your total income is less than $20,000 or you live in Nunavut, Yukon or the Northwest Territories, you won’t need a license.
Security: The software does not connect to the internet except when you update it.
Available in: All provinces and territories in Canada. The Mac version does not support the Quebec TP-1 return.
Pros of StudioTax
- It is CRA-approved for NETFILE
- Offers an Enterprise version (paid) for tax professionals
- A free option is available if your income is less than $20,000
Cons of StudioTax
- No direct support is available
- It does not have a web-based version
- It is lacking tax forms for non-resident returns and multiple jurisdiction taxes
- Audit assistance is not provided
Pros and Cons of Filing Your Taxes Online
When you file your taxes online using tax software that has been approved by the CRA, you can automatically and accurately complete some sections of your return using the Auto-fill my Return tool.
The software program provides guidance on what to do and how to maximize your refund. It also does all the calculations.
After completing your return and filing it, you get quick access to your notice of assessment and if you are set up for direct deposit, your refund is generally processed within 2 weeks.
Individuals with a complex tax situation or corporation tax returns may benefit from using an accountant vs. an online tax software.
A CPA is more familiar with tax planning and tax laws and they may be able to save you money over time.
You can also get professional advice by choosing a tax software that offers expert assistance and review, such as the TurboTax Assist & Review product.
Other Free Tax Filing Options in Canada
In addition to a free tax software, some tax filers are eligible to file their taxes with the CRA for free.
File My Return: If you are eligible for this service, the CRA will send you an invitation letter containing information on how to proceed.
Free Tax Clinics: These free tax services are offered through the Community Volunteer Income Tax Program. They are available to low and moderate income Canadians who have simple tax returns.
You can find a free tax clinic in your area here.
Income Assistance-Volunteer Program: This free program is available in Quebec and is offered to Canadians with simple tax situations and a modest family income.
TurboTax vs. SimpleTax vs. StudioTax vs. UFile
|Price||Free option; standard version costs $19.99||Free; donation recommended||$15; free option available||Free option; standard version costs $19.95|
|CRA-approved and NETFILE ready||Yes||Yes||Yes||Yes|
|Supports CRA’s Auto-fill||Yes||Yes||Yes||Yes|
|Support available||Phone, email, chat||Youtube Tutorials||Email and phone|
|Audit Assistance||Yes, for a fee||No||No||No|
|Mobile App||iOS and Android||iOS and Android||iOS and Android||No|
|Guarantee offered||Maximum refund and 100% accuracy||Maximum refund and 100% accuracy||N/A||Best refund and accuracy|
|Availability||Canada-wide||Canada-wide||Canada-wide; Mac version limited in Quebec||Canada-wide|
|Optional add-ons||Tax expert filing; review; corporation returns; desktop app||N/A||Desktop app||Premium version available|
|Learn more||Learn more||Learn more||–||–|
Tax Updates For the 2021 Tax Season
For the 2021 Tax Year, you should take note of the following tax numbers:
Federal Income Tax Rates
- Up to $49,020: 15%
- $49,021 to $98,040: 20.50%
- $98,041 to $151,978: 26%
- $151,979 to $216,511: 29%
- $216,512 and over: 33%
For Provincial tax rates and brackets, visit the applicable links below:
- Saskatchewan Income Tax Rates
- B.C. Income Tax Rates
- Alberta Income Tax Rates
- Ontario Income Tax Rates
- Manitoba Income Tax Rates
Tax Free Saving Account
The TFSA Contribution limit for 2021 is $6,000, remaining at the same level it was in 2020.
Here are some TFSA investment options.
Basic Personal Amount
The basic personal amount in 2021 is $13,808 (compared to $13,229 in 2020). Individuals who earn a taxable income higher than $151,978 will see a gradual phase-out of the basic personal amount until it reaches $12,421.
The RRSP limit is 2021 is $27,830, an increase of $600 from the $27,230 dollar limit in 2020.
Canada Child Benefit
The base CCB amount for children under 6 is increasing to $6,833 (from $6,765 in 2020) and for kids aged 6 to 17, it is increasing to $5,765 (from $5,708 in 2020).
For a longer list of tax and benefit that have changed, click here.