The Department of Finance has proposed new rules that will impact the tax filing requirements of not-for-profit organizations. If passed, these changes will apply to fiscal years starting on or after January 1, 2026.
What’s Changing?
Currently, a non-profit organization which is exempt from tax has generally needed to file an information return, referred to as a T1044, for the period if any of the following conditions were met:
- It has received dividends, interest, rentals or royalties in excess of $10,000 in that period;
- Total assets of the organization exceed $200,000 at the end of the immediately preceding fiscal period; or
- The organization was required to file an information return for a previous fiscal period.
Under the new proposal, organizations will also need to file this form if they receive more than $50,000 in gross receipts.
In addition, proposed amendments introduce a new “short-form” information return for any organizations exempt from tax that do not meet the above described reporting conditions. This short-form information return will contain prescribed information including a description of the organization, the organization’s total assets, total liabilities and total amounts received for the period, and the name and address of each director, officer or trustee of the organization. Effectively creating reporting requirements for any size of not-for-profit organization.
What Are “Gross Receipts”?
“Gross receipts” is not a defined term but is interpreted to mean all amounts received by the non-profit during the year, including funding and operating revenue, proceeds received from the disposition of any capital property, interest, rental revenue, dividends and any other receipts.
When Does This Start?
These changes are still under review in Parliament, but if passed, will apply to fiscal periods beginning January 1, 2026 or later.
Talk to your Welch advisor to understand how these changes could affect your organization.
