[News] New income tax reporting requirements for nonprofits

Changes to the Annual Return

Currently, there is limited reporting required by nonprofits that claim an income tax exemption. A nonprofit is required to file an annual information return if:

• the total of all passive income in the fiscal period exceeds $10,000;
• the organization’s total assets at the end of the preceding fiscal period exceeded $200,000; or,
• an information return was required to be filed by the organization for a preceding fiscal period.

The 2024 Fall Economic Statement proposes to amend the Income Tax Act to require nonprofits with total gross revenues over $50,000 to also file the annual nonprofit information return.

New filing requirement for small nonprofits

The 2024 Fall Economic Statement also proposes to amend the Income Tax Act to require nonprofits that do not meet the thresholds for filing the annual nonprofit information return to file a new, short-form return that contains basic information about the organization, including:

• its business number or trust number;
• the name of the organization and its mailing address;
• the names and addresses of the directors, officers, trustees or similar officials;
• a description of the organization’s activities, including whether it conducts activities outside Canada;
• the organization’s total assets and liabilities and annual revenues; and,
• other prescribed information.

Coming into force

These measures would apply to the 2026 and subsequent taxation years.

For further information about the new reporting requirements for nonprofits, click here.