Almost every one of our corporate farmers are being re-assessed for their 2023 T2 returns to correct a calculation error on line 200 of Schedule 63.
The good thing is the re-assessments are all resulting in refunds, the embarrassing thing is the clients assume mistakes were made on their 2023 T2 return, resulting in an over payment of tax.
Was this a TaxCycle calculation error or was there some kind of retroactive change to the fuel charge proceeds credit for Ontario farmers?
The change in credit ranges from $50 to a couple of thousand depending on the gross farming expenses.
It depends on the year-end date and whether the Minister of Finance has announced the rates for the year. If none announced, it defaults to zero for those months. When the rates finally get announced, T2 returns are reassessed and clients are issued a refund.
See this news bulletin from TaxCycle that probably explains it better than I do.
2023 rates were announced by Finance in Jan 2024. So, the new 2023 rates were added to TaxCycle T2 S63 in January last year (I believe a few days after the rates were announced). It could be related to that.
2024 rates are also coming and if last year timing is a good indication, the rates should be announced this week or the next week. We will get those into TaxCycle T2 as soon as they are announced.
These would have been 2023 T2 returns filed before the end of 2023, so likely the same will happen for 2024.
I suppose the good news is they are re-assessing the T2 returns automatically without requesting an adjustment to process the additional credit. They are also simply processing the raw credit without adding an entry on the Schedule 1 to tax the increased credit (strange).
Anyway, I suppose this is likely to continue year after year until someone decides to “axe the carbon tax”.
