Canada Revenue Agency
www.cra.gc.ca
Common menu bar links
T3010B: Line-by-Line Review
Questions and answers
The following consists of questions that were not answered during the English webinar and questions from the French Webinar. Additional questions, which were answered during the English webinar, can be found by viewing the High-speed version (FLV, 155 MB) or Dial-up version (FLV, 31.4 MB), or by reading the Transcript.
If you would like to ask other questions, contact our Client Service Section at 1-800-267-2384.
T3010B - Programs and general information
1. Is a short-term mission trip abroad considered service outside Canada?
Yes. All expenditures (whether incurred inside or outside Canada) for any programs that took place outside Canada during the fiscal period should be included in Schedule 2, Activities Outside Canada. This includes amounts that the charity paid its own employees as well as amounts paid to other individuals or organizations to carry on these programs.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
2. If we are in the middle of a capital campaign for renovations to our building, would this be considered a "program" for Section C2?
No. It would not be considered a "program" if it is a fundraising campaign. Fundraising activities should not be included in Section C2 because they are not charitable activities. This section should include all the charitable activities the organization carries out on its own through employees or volunteers, and through intermediaries, as well as gifts it makes to qualified donees.
A charity may use this section to provide details about the contributions of its volunteers in carrying out its programs, including the number of volunteers and the hours that they worked. Registered charities that provide grants to other organizations should describe the types of organizations they support.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
3. Does Section C9 include all employees on the charity's payroll?
Yes. Section C9 refers to compensation of all the charity's employees (full and part-time) during the fiscal period.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
4. What is the reimbursement policy for out-of-pocket expenses?
Please refer to Policy Commentaries CPC-012, Expenses Incurred by Volunteers and CPC-025, Expenses Incurred by Volunteers.
5. Can a charity pay for airfare, hotel, and meals to bring out-of-town board members into town for board meetings?
Yes. A charity can pay for these expenses directly or it can reimburse the out-of-town board member for the expenses incurred.
A charity should also have a policy in place on reimbursing volunteers and directors. The policy should specify the type of expenditures the charity is prepared to repay (e.g., for materials purchased for the use on a charitable activity or for reasonable accommodation if the volunteer is traveling on the charity's business). It should also specify appropriate procedures to document the volunteers' payments, such as submitting credit-card receipts. Such a policy enables the charity to demonstrate that it is controlling the use of its resources for charitable purposes.
6. Why are administration expenses subject to a contribution but are not automatically included in expenditures incurred for charitable programs?
The Act states that a registered charity must dedicate almost all its resources to carrying out its charitable programs. Costs such as bank charges, fees for incorporating the organization, accountant fees for filing the return, or costs for renting premises for a board of directors meeting are all administration expenses. They are not expenses directly related to carrying out your organization’s charitable programs. You must therefore break down your administration expenses, and expenses incurred to carry out your charitable programs, on different lines of the T3010B.
7. Are portfolio management fees, brokerage fees and accounting fees included as professional and consulting fees?
Yes, you can include all fees for professional or consulting services on line 4860 of Schedule 6. The amount of fees associated with management, brokerage and accounting fees will then be entered on line 5010, as these expenses are related to management and administration.
8. Revenue from a GST refund. What line is this entered on?
Normally, GST refunds should not be reported in an organization’s revenue unless you have included GST payments in your expenditure amounts, in which case you can report GST refunds on the “other revenue” line for the purposes of your revenue. Usually, though, you are asked not to report the GST amount in your expenses and not to report GST refunds.
T3010B - Financial information
9. How many of the four criteria listed in Section D does a charity have to meet in order to complete Schedule 6?
If any of the following four criteria applies to your charity, you must complete Schedule 6, Detailed Financial Information, instead of Section D. If none of the following applies, the charity must complete Section D.
a) The charity's gross revenue exceeds $100,000.
b) The amount of all assets (e.g., investments, rental properties) not used in charitable programs exceeds $25,000.
c) The charity currently has permission to accumulate funds during this fiscal period.
d) The charity has spent or transferred enduring property during this fiscal period.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
10. On what line should you report the amount paid to an independent contractor?
Report the amount on line 4860 - Professional and Consulting Fees if the amount is for services such as legal, accounting, or fundraising.
Report the amount on line 4920 - Other expenditures not included in the amounts above if the amount is for the services of tradesmen such as electricians, plumbers, and painters.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
11. We have had a fundraising dinner and have calculated the split receipting portion. We have indicated that we will issue receipts upon request. If we receive a request for a receipt after our year end, I am assuming that the receipt should be included on line 4500 in the next fiscal year. Is this correct?
No. You should include the receipted amount on line 4500 of the return for the fiscal period in which the donation was received. If it happens that the return has already been filed, the charity should request that the return be amended.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
12. When the church year runs from May to April, how do we report tax receipted amounts on line 4500? Our tax receipts are issued January to December.
As indicated in the response to question 8, you must report all tax-receipted amounts on the return for the fiscal year in which the donations were received. Since there are no requirements for your charity to issue receipts at a particular time, your charity may wish to change its receipting process to bring it more in line with its fiscal year end reporting. This will also make it easier to keep appropriate books and records for receipting purposes.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
13. Should a church include restricted funds (e.g., funds received from an appeal to repair the church roof) on line 4300?
No. Funds held for a special purpose are considered an asset not a liability. The amount should be included as an asset on line 4200 if the charity is completing Section D, or as an asset on line 4100 or 4140 if the charity is required to complete Schedule 6. If the funds were receipted, they should also be reported on line 4500.
Any property that is not used directly in charitable activities or management and administration, including cash on hand and in bank accounts, should be included in the calculation for lines 5900 and 5910 when the charity is required to complete Schedule 6.
Line 4300 includes the value of any amounts that a charity owes. This includes salaries owing, the current (short-term) portion of long-term debt obligations such as loans, mortgages, notes, and payments due for goods and services received.
(Reference: Guide T4033B, Completing the Registered Charity Information Return)
14. What is the difference between line 4840 - Office supplies and expenses and line 4891 - Total cost of all purchased supplies and assets
On line 4840, you should enter the total amount paid for office supplies and expenses. On line 4891 you should enter the cost of all supplies and assets purchased, other than office supplies included in line 4840.
15. Why are administration expenses subject to a contribution but are not automatically included in expenditures incurred for charitable programs?
The Act states that a registered charity must dedicate almost all its resources to carrying out its charitable programs. Costs such as bank charges, fees for incorporating the organization, accountant fees for filing the return, or costs for renting premises for a board of directors meeting are all administration expenses. They are not expenses directly related to carrying out your organization’s charitable programs. You must therefore break down your administration expenses, and expenses incurred to carry out your charitable programs, on different lines of the T3010B.
16. Are portfolio management fees, brokerage fees and accounting fees included as professional and consulting fees?
Yes, you can include all fees for professional or consulting services on line 4860 of Schedule 6. The amount of fees associated with management, brokerage and accounting fees will then be entered on line 5010, as these expenses are related to management and administration.
17. Revenue from a GST refund. What line is this entered on?
Normally, GST refunds should not be reported in an organization’s revenue unless you have included GST payments in your expenditure amounts, in which case you can report GST refunds on the “other revenue” line for the purposes of your revenue. Usually, though, you are asked not to report the GST amount in your expenses and not to report GST refunds.
Financial statements
18. When the CRA refers to "audited financial statements", does that also include "review engagement reports" prepared by an accountant?
A review engagement report is not a substitute for audited financial statements. When financial statements are reviewed by an accountant, the accountant may provide a review engagement report or review report. If this is the case for your charity, please include it as part of the financial statements when you file your annual information return.
19. Our financial statements have not been audited. Are we still required to file them?
Yes. A copy of your charity's financial statements is a required part of your annual information return. Failure to file financial statements with the return could lead to the revocation of your charity's registration. The CRA recommends that charities file audited financial statements if their gross income from all sources is more than $250,000. The charity's treasurer should sign any financial statements that have not been professionally audited.
Note
The laws regarding audited financial statements may differ for charities incorporated federally, provincially, or territorially. Charities should contact their incorporating authorities to be sure.
