Although the majority of businesses file tax information slips (such as T4s and T4As) electronically, there are still many, particularly small businesses, which file them on paper. From January 1, 2024, the number of businesses that can continue to file on paper has been narrowed.
Currently, businesses filing 50 or fewer information returns per year are allowed to file them on paper. All other businesses must file electronically.
From January 1, 2024 only businesses that file 5 or fewer slips will still be permitted to file on paper. This means that only the smallest of businesses will still be able to do so.
Penalties for paper filing more returns than is permitted are relatively minor. For example, a corporation that qualifies to paper-file under the current rules but will not qualify under the new rules will suffer a $125 penalty if they continue to paper-file after 2023. However, particularly for the small businesses affected by this change, even minor penalties can be a significant unwanted expense.
The full CRA communication, with further details on how to file electronically, can be found here.