The Canadian tax deadline of May 1, 2023, has now passed. However, if you’ve missed the tax deadline don’t worry, you can still file your return and claim your tax refund.
In this guide, we will cover everything you need to know about filing after the tax deadline.
Can I file my taxes after the Canadian tax deadline?
Yes, filing late is better than not filing at all!
But the answer depends mainly on whether you owe taxes or not.
Every year thousands of people apply for their tax refund after the deadline has passed.
But even if you are not entitled to a refund, it is still very important that you file your documents as soon as possible. If you're late filing and don't owe taxes then you won't pay penalties — but you can still take a financial hit. The government will hang on to any refund until you file a return, and there might also be a delay in getting benefit payouts you're eligible for, such as the GST or Child Tax benefits.
I am due a refund. Will I be fined for filing late?
No, if you are due a refund, there will be no CRA penalty or fine for filing late.
If you worked in Canada in the past ten years, it is possible to claim a refund for these years.
However, it is good not to wait until the last moment because some refundable credits like the EI overpayment are limited to be claimed within 2 years after the end of the tax year.
You may be due a tax refund if you overpaid income tax, overpaid in the Canadian Pension Plan, or overpaid employer insurance.
Most working holidaymakers are entitled to claim something back – so it’s worth investigating how much you’re owed.
Even though there is no fine or penalty the sooner, you file the sooner you receive your money back in your account.
I’m not entitled to a refund. Do I have to file my tax return?
If you owe money to the CRA, you must file as soon as possible.
The CRA charges a late-filing penalty.
Although the CRA is often understanding in cases where income is not reported and it is not unusual for penalties to be waived if you voluntarily disclose previously unreported income.
It is also important to note that even if you could not pay your full balance owing on or before 1 May, it is possible to avoid the late filing penalty by paying the amount you owe before 1 September.
What if I’m self-employed?
Self-employed tax returns are due on June 15, 2023, but any balance owed is due on May 1, 2023.
What Happens if I skip a year filing taxes
If you skip a year of filing and do not owe any money to the CRA, nothing will happen. When filing, it is possible to claim back taxes for up to 10 years.
If you owe taxes to the CRA, you will be charged a late-filing penalty.
If you owe taxes and either don't file a return or don't pay, starting May 1 you'll start racking up penalty charges and daily compound interest on the unpaid amount.
The penalties start at five percent of the amount owing, plus one percent of the balance owing for each full month that the return is late — and compound daily interest is charged on the total amount due. If you file late more than once in four years, the penalties can double.
And if you don't report income twice or more within four years, you can be hit with a "repeated failure to report income" penalty. This penalty is a big one – 20 percent of the total amount of income that was earned and not reported in the most recent year.
How long does it take to process the previous year’s tax returns?
Most Canadian tax refunds are issued anywhere from two to 16 weeks depending on the type of return and when you filed it.
Of course, if the CRA is working through a backlog it will take longer for it to be processed.
How do I file a late return in Canada?
Well, you can file your tax return yourself with the Canadian Authorities.
Alternatively, if you would like help with your tax return, you should contact a tax professional.
Tax professionals will handle all the tricky tax paperwork, ensure you are fully tax compliant, and transfer your maximum refund straight to your bank account.
The average Canadian tax refund is $998 – so it’s definitely worth claiming back what you’re owed.
Can I make installment payments?
Yes, you can pay in installments. Make sure to contact the CRA and explore the various payment arrangements depending on your situation.
Generally, there are 3 ways to pay taxes owed:
Online banking: Set up CRA as a payee on your online banking bill payment service, and use your Social Insurance Number (SIN) as your account number.
CRA My Account: You can make payments directly from your bank account on a set date, and even set up installment payments.
In-person: You can always pay in person at most major banks, just bring along your remittance voucher or original remittance slip.
Choose whatever method you’re most comfortable with!
Can I cancel or waive penalties and interest?
Under certain circumstances, the CRA will consider offering relief. It’s best to acknowledge late or incorrect tax returns, or if your payment is late, as soon as possible with the CRA to see if they can offer options to ease your payment burden.
There are 3 ways you can do this:
- Request to waive penalties or interest.
- Use the CRA’s Voluntary Disclosures Program (VDP) which allows you to notify them of any unreported income or mistakes on any return, including any previous years.
- Apply for COVID-related relief if you’ve received COVID-19 benefits.
As daunting as it can feel, remember that the CRA is on your side and there to help.
Missed the CRA Tax Deadline?
Are you feeling anxious and uncertain about missing the May 1st, 2023 tax filing deadline? If so, rest easy. It happens to the best of us!
It’s never too late to file your return.
If you’ve missed the tax deadline, we’ve got your back even if you’re running a little behind schedule. However, time is of the essence so it’s best to roll up your sleeves and get your tax forms in order as soon as possible.
Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.