The Canada Revenue Agency (CRA) says it is experiencing further processing delays for reassessing incorrectly assessed T1 returns claiming the lifetime capital gains exemption (LCGE) in 2024.
“Our processing times are up to 20 weeks for non-complex reassessments and 30 weeks for complex reassessments,” Charles Drouin, CRA spokesperson, said in an emailed statement on Wednesday.
Earlier this month, the CRA had projected those two timelines to be 10 and 20 weeks, respectively.
As previously reported, incorrect assessments of some T1 returns were caused by two unspecified issues that were resolved in April and May. Drouin’s statement on Wednesday reiterated that the agency is proactively completing reassessments, and that taxpayers don’t need to submit a request.
One affected taxpayer, who had sold a business and claimed the LCGE on their T1, proactively paid the CRA liability arising from the incorrectly assessed return so that the bank would approve a mortgage. The CRA has since reassessed the taxpayer, who is getting a refund.
The CRA’s emailed statement also addressed delays in general.
“Lately, processing times in certain areas are longer than they should be. We understand that it is our responsibility to adapt and enhance our service delivery,” it said.
The agency has established a 100-day service improvement plan focused on increasing contact centre capacity, expanding online self-service options, tackling root causes of service issues and accelerating service modernization.
“We are also deploying targeted teams to improve delivery time in high-demand areas such as T1 adjustments, disability tax credit (DTC) applications, and Canada child benefit claims,” Drouin’s email said. “These teams will use a variety of tools to improve turnaround times and lessen administrative burden, reducing the need for Canadians to contact us in the first place.”
In its 2024 annual report, the CRA’s disability advisory committee said the DTC is underused due to complexities in the application process, tax-filing difficulties and challenges with CRA processes and contact centres.
In March the Office of the Taxpayers’ Ombudsperson published a report on how the CRA administers the Canada child benefit for temporary residents. The office found issues that cause unnecessary interruptions in payments and made several recommendations to rectify the problem.