For decades, many smaller Canadian Not-for-Profit (NFP) organizations operated with a relatively light administrative burden regarding taxes. If your organization didn’t have significant assets or investment income, you often didn’t have to file an annual return with the Canada Revenue Agency (CRA).
That era is effectively ending.
Major changes introduced by the Department of Finance are set to take effect for fiscal periods beginning on or after January 1, 2026. These new rules fundamentally shift the reporting landscape, meaning almost every tax-exempt NFP—regardless of size—will now have an annual filing obligation.
At MPCPA Professional Corporation, we know that boards of directors and volunteer treasurers are already stretched thin. Here is a breakdown of what is changing and how your organization needs to prepare to protect its tax-exempt status.
1. The Expansion of the T1044 Return
Historically, an NFP only had to file the T1044 NFP Information Return if it met specific criteria, most notably having total assets exceeding $200,000 at the end of the year or receiving more than $10,000 in interest/dividend income.
Under the new 2026 guidelines, these complex thresholds are being replaced. An NFP must now file this comprehensive return if the total of all amounts received in the fiscal period exceeds $100,000.
This “gross receipts” test is much easier to hit than the old asset test. It includes virtually all inflows: membership dues, grants, donations, fundraising revenue, and operational income. Many mid-sized organizations that previously did not have to file a T1044 will now fall squarely into this requirement.
2. The New “Short-Form” Information Return
The most significant change impacts smaller organizations. The CRA is introducing a new “short-form” information return for NFPs that fall below the $100,000 gross receipts threshold.
This means the “fly under the radar” option is gone. The government’s goal is to increase transparency across the entire sector. While less burdensome than the full T1044, this short form will still require accurate reporting of basic financial data, activities, and the names of directors and officers.
What Are the Risks?
The CRA is increasing scrutiny to ensure organizations claiming tax-exempt status are genuinely operating without a profit motive. Failure to file these new returns accurately or on time could lead to financial penalties and, in severe cases, the revocation of your NFP status.
Prepare Your Organization Now
Navigating new tax legislation can be overwhelming for volunteer boards. The key to preparing for 2026 is impeccable record-keeping starting now, ensuring your bookkeeping accurately tracks gross receipts so you know which return you are required to file.
Don’t wait until the end of the 2026 fiscal year to address this. Contact us for a free consultation or call us at 905-246-1267.