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Kevin Greenard: Sharing tax information with your Portfolio Manager

The Canada Revenue Agency's My Account service provides an easy way for portfolio manaers to access clients’ tax information.
Kevin Greenard

Whenever we begin a new client relationship, one of the first steps we take is to obtain online Canada Revenue Agency access to view our clients’ tax information through CRA My Account. There is so much valuable information on My Account that we use to be proactive in our approach to investment and Total Wealth Planning.

Much of the historical information we need regarding our clients’ tax situation and federal programs is available in electronic form. For those clients who don’t already have CRA “My Account” and a “My Service Canada Account” set up, we encourage them to do so. Although it may take approximately 30 minutes to set both up, you are opening the gateway to your information. Once you have My Account set up, it does not expire. These services provide some valuable information that is useful for making informed short-term financial decisions and assisting with your long-term Total Wealth Planning.

Canada Revenue Agency My Account

We encourage clients to set up CRA My Account to have electronic access to their tax information (see below). The steps required to do so are relatively straightforward, and typically access can be granted within a couple of weeks. For clients who have just gained access to My Account, we first encourage them to manage their representatives. These are individuals that you wish to have some form of access to your tax information. Clients can check the list of their authorized representatives online. You may find over the years that you have representatives, such as a professional accountant, that you no longer use. We recommend that you remove anyone you no longer wish to have access.

Steps required to set up My Account for individuals

To set yourself up for CRA My Account, you will need to complete two steps.

The first step is to provide your personal information. You will need the following items, so we recommend having them to hand when you go to complete the first step:

- Social insurance number

- Date of birth

- Postal code

- An amount entered on one of your income tax returns from either the current or previous taxation years

- You will be prompted to create a CRA user ID and password

- You will also be prompted to create a variety of security questions and answers for verification purposes when you go to log onto My Account in the future

Once step one is complete, a CRA security code will be sent to you in the mail. While you wait for your code in the mail, you will be able to access partial tax information on My Account.

When your CRA security code arrives, you will be able to complete the second and final step to finish setting up your online access. To do this, log in to CRA My Account using your CRA user ID and password. You will be prompted to enter your CRA Security Code, at which time you will then gain full access to your account. Having this full access online is a great benefit, rather than spending time sifting through past tax returns, Notices of Assessments, and T-slips to find the information you are looking for.

Represent a client

Another benefit of clients having their My Account set up is the ability to quickly appoint those individual(s) that you wish to have access to your account. This individual or business is referred to as a representative, and they must have a seven-digit code. You can enter the seven-digit code of the representative and then they would immediately have access to your account. If you do not have My Account set up, then a representative would request that you sign a certification form and will require a line amount from one of your previous tax returns. This form would then be submitted to CRA and access would typically be granted in three business days and CRA will call you by telephone to confirm the request.

Access level

Whether you appoint a representative through My Account or by completing the certification form, you will have to determine what level of access to grant the representative. These levels of access are referred to as either Level 1 or Level 2. Accountants typically request Level 2 authorizations. Level 2 provides your representative the ability to obtain all the information listed in Level 1 (see below). In addition, a Level 2 authorized representative may ask for changes to your account, including: adjustments to income, deductions, non-refundable tax credits, and accounting transfers. It is important to note that you can have more than one representative. Our clients will typically appoint us as a Level 1 representative and appoint their accountant (if they have one) as a Level 2 representative.

Level 1 access

As a Portfolio Manager, we do not make adjustments to client accounts – those are done by our clients’ accountant. When we access our clients’ accounts we do so through the “Represent a Client” section of the CRA website. We have many conversations with accountants based on the information we access through Level 1 Represent a Client. The following is a list of the main services we can access with Level 1 Authorization:

- Benefits and credits overview

- Proof of income statement (option “C” print)

- View CRA account balance and statement of account

- View Canada Child Benefit and related BC programs payments, account balance, and statement of account

- View net-capital and non-capital carryover amounts, and whether you have requested losses to be carried back (i.e. T1A submitted)

- View disability tax credit

- View GST/HST credit and related provincial programs payments, account balance, and statement of account

- View Home Buyers’ Plan and Lifelong Learning Plan

- View instalment notices and balances

- View CRA mail

- View returns and notices of assessment and reassessment

- View Registered Retirement Savings Plan (RRSP) information, including RRSP Contribution Receipts (historical), RRSP Deduction Limit, and Unused RRSP Contributions

- View Tax-Free Savings Account (TFSA) Contribution Limit and historical transactions

- View tax information slips – T4, T4A, T4A(P), T4A(OAS), T4E, T4RSP, T4RIF, T5007, T3, T5, T5008, etc.

- View Universal Child Care Benefit payments, account balance, and statement of account

- View Canada Workers Benefit

- Your marital status (but does not show information related to your spouse or common-law partner)

Top 10 uses

1) We can access our clients’ latest tax returns and notices of assessments without them having to photocopy and send them to us. In most cases, we will have access to the notices of assessment and reassessment prior to our clients receiving copies in the mail.

2) The Tax-Free Savings Account contribution room used to be on the Notice of Assessment – it no longer is. The only place where this information is located is online. We can contribute the exact dollar amount by obtaining the TFSA contribution room directly from CRA. This is especially important if you have made sporadic contributions and withdrawals in the past.

3) The CRA website has all the taxable capital gains and unapplied net losses. It also lists whether a net loss was applied from a prior year or from a subsequent year. If the unapplied net loss has not been applied, then this can be factored into the investment recommendations. Having access to the capital gains and net loss carryover amounts is important when determining tax loss selling strategies (i.e. the ability to carry net capital losses back up to three years). Without access to the website, the tax loss selling strategies would typically be looked at within the context of the current year only.

4) On many occasions, we have been able to identify situations where our clients should be applying for the disability tax credit. We will print off the T2201 Disability Tax Credit Certificate and encourage them to speak with their doctor. This has resulted in significant annual tax savings. There are often medical expenses, caregiver amounts, and other items to discuss with the client and the client’s accountant.

5) Represent a Client access allows us to see if a client has made significant donations in the prior year. We have been able to quantify the tax savings of donating shares of publicly traded securities versus cash donations. We can also assist with the letters of direction and transfer of publicly traded shares.

6) Over the years, we have noted many couples not taking advantage of pension and income splitting. When we see a huge disparity between the incomes, we want to make sure couples are fully aware of all options available to reduce the household tax bill. Having access to both spouses’ CRA accounts enables us to view the information and provide some financial options to speak with our clients and our clients’ accountants.

7) Instalment notices come out every February and August. Most of our clients who must make instalment payments will request that we make those on their behalf. We can simply download the latest instalment notice and remit payment directly to CRA.

8) Having access to tax information enables us to put together proposals on registered account contributions or withdrawals based on age, income, and many other factors. The annual RRSP deduction limit, prior years’ RRSP deduction limits, unused RRSP contributions, and prior year RRSP contribution history are all available online.

9) When we have access to the CRA website we can see if clients have amounts payable to CRA either through current filings, or through reassessments. In many cases, we can assist with either responses to CRA for request for information or making payments to the Receiver General directly from our client’s non-registered account.

10) We can help our clients avoid CRA penalties through knowing contribution limits and making required payments to CRA on time. CRA may charge penalties (referred to as T1-OVP) if you over contribute to a registered account. Interest charges and penalties can also apply if tax filings or instalment payments are not done by the applicable due dates. When we see anything unusual, we will be able to provide some recommendations when we have access to the information.

You will find several personal benefits for setting up My Account and providing access to a trusted representative(s). You will be able to access all your historical tax information without digging through boxes. Many clients have found this useful when obtaining financing when a financial institution requires multiple years of tax returns and notices of assessment. You will feel better about getting rid of some of those really old tax files, knowing you can access much of the information online. In addition, you will be able to set up email alerts with CRA so you can access current information before you would have received it by regular mail.

Electronic access to CRA will enable your representative to work for you regardless of how busy you may be. Electronic access should reduce errors and any confusion that verbal communication may create. Represent a Client provides an efficient process of gathering historical tax information and participation in any federal programs. We are not asking our clients to spend time providing information that we can easily access ourselves. The time we spend with clients can be focused on talking about the present, the future, and mapping out different options that we can also discuss with your accountant.

My Service Canada Account

The other online account we recommend clients use is the My Service Canada Account (MSCA), which is a secure online portal that lets you apply, view, and update your information as it relates to Old Age Security (OAS), Canada Pension Plan (CPP), Canada Pension Plan Disability, and Employment Insurance.

Nearly all our clients who are approaching 60 have asked if they should begin collecting CPP or defer. The same applies to OAS — should you collect at age 65 or defer it?

Every client situation is unique, and we look at many factors when providing our recommendations. If you printed off the MSCA information and provided it to your Portfolio Manager, then they would be in a better position to provide you advice. Every time we are updating a financial plan or making pension related decisions, we request the MSCA information.

Kevin Greenard CPA CA FMA CFP CIM is a Portfolio Manager and Vice-President, Wealth Management, with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week at Call 250-389-2138, email, or visit