Form GST74: how and when to elect the Quick Method

How to elect the Quick Method

The short version, based on CRA RC4058. Each step is explained in more detail below.

1. Check that you are eligible. Confirm the RC4058 conditions: a permanent establishment in Canada, annual worldwide taxable supplies of $400,000 or less (GST/HST included, with associates), 365 days in business without revoking a Quick Method election, and a business type that is not excluded.
2. Compare both methods first. Estimate your Quick Method remittance and your break-even input tax credits in the free calculator. The election generally has to stay in place for at least one year, so check that it is likely to help.
3. Pick your start date. The election has to take effect on the first day of a GST/HST reporting period.
4. Elect by the deadline. Annual filers elect by the first day of the second fiscal quarter. Monthly and quarterly filers elect by the due date of the return for the reporting period in which they begin using the Quick Method.
5. Submit the election. Elect in My Business Account, through Represent a Client if someone files for you, or with Form GST74.
6. File with the Quick Method rate. On each return, enter your tax-included eligible sales on line 101, multiply them by your remittance rate for line 103, and claim the 1% credit on the first $30,000 of eligible sales on line 107 if it applies.

Educational information only, not tax advice. This page does not decide whether you qualify or whether you should elect.

Step 1: confirm you are eligible

RC4058 lists the conditions. In plain terms:

• You have a permanent establishment in Canada.
• Your annual worldwide taxable supplies, including GST/HST and those of your associates, were $400,000 or less in the first four or the last four of your last five fiscal quarters.
• You have been in business continuously for the 365 days before the reporting period you want to start in, and you did not revoke a Quick Method election in that time. A new registrant can still elect if it reasonably expects $400,000 or less in its first full year.
• Your business is not excluded. Excluded businesses include bookkeeping, financial consulting, tax consulting and tax return preparation; legal, accounting and actuarial services; listed financial institutions; charities; and public institutions.

Step 2: make the election on time

The election must take effect on the first day of a reporting period. You can elect online through My Business Account, through Represent a Client if someone files for you, or by sending Form GST74.

Worked example: a calendar-year annual filer

A self-employed Ontario consultant has a December 31 fiscal year-end, files annually, and has been registered since 2024. They want the Quick Method for the 2027 fiscal year. The second fiscal quarter of 2027 begins on April 1, 2027, so the election must be made by April 1, 2027, effective January 1, 2027. Because the election is in effect at the start of the fiscal year, they can also claim the 1% credit on the first $30,000 of eligible tax-included sales (up to $300).

With $60,000.00 of sales, the calculator estimates a Quick Method remittance of $5,666.40, against $7,800.00 of HST collected. Whether that beats the regular method depends on their ITCs: the break-even is $2,133.60.

Step 3: stay on it for at least a year

Once it is in effect, the election generally has to stay in place for at least one year. You can revoke it after it has been in effect for one year, and the revocation must be filed by the due date of the return for the last reporting period in which you want to use the Quick Method. After revoking, you generally have to wait at least one year before electing again. The election also stops if you are no longer eligible, for example if your taxable supplies go over $400,000. RC4058 sets the date you switch back to the regular method by filing frequency: see when the $400,000 ceiling ends the election.

Step 4: file as usual

Your return is filed the same way (all registrants file electronically for reporting periods beginning on or after January 1, 2024). You simply use the Quick Method amount as your net tax, minus the 1% credit and any ITCs on capital purchases. Keep your records for six years.

Quebec businesses deal with Revenu Québec rather than CRA for the GST and QST, so the forms differ.