Have you recently seen someone talking about “the CRA debt recovery program” on social media or the news? In early April 2024, the Canada Revenue Agency (CRA) announced that it’s resuming efforts to recover taxpayer debt via “offsetting.”
Offsetting is when the CRA proactively applies tax refunds and benefit payments to a taxpayer’s debts rather than paying them as they typically would, a practice that the CRA paused in 2020 due to the pandemic but resumed in 2023. This has led to some Canadians posting on social media in frustration after finding out the tax refund they were expecting might not be coming.
If you’ve already filed your taxes you’re worried about your tax refund, we’re here to help! This article explains why the CRA is holding back some taxpayers’ refunds, how to check your income tax refund status, and what to do if you get a notice from the CRA that your tax refund might be affected. First, we’ll start with some basics:
The CRA is using tax refunds to “offset” other debts you may owe the government through its debt recovery program.
If your tax refund is wrongly impacted, you have 90 days to appeal your notice of assessment (NOA).
To prove your case to the CRA, you’ll have to provide reasons and documentation as to why the assessment is wrong.
What is the CRA’s refund timeline?
The CRA has a timeline for processing its refunds—with some dates as soon as two weeks. So you might be wondering what’s taking so long with your refund if you received a notice from the CRA right after you submitted your tax return that you were owed a refund but haven’t gotten it yet. The notice of assessment (NOA) you received, however, is what’s known as an express NOA and is only an estimate of your notice of assessment and refund.
If you’ve recently submitted your tax return but haven’t yet received your official notice of assessment or refund, it’s likely that the CRA just hasn’t gotten to checking your tax return yet.
The CRA’s goal is to send taxpayers their NOA and refund within these CRA processing times:
Online – 2 weeks
Paper – 8 weeks
Non-resident returns – 16 weeks
However, these CRA refund timelines only apply to returns that come in on or before the individual tax deadline of April 30. It might take longer to process returns that come in after that date or are flagged for a more detailed review.
A detailed review could be triggered because you were randomly selected for an additional review or because items on your return may require more scrutiny (for instance, the information on your return doesn’t match other sources like your T4 slips, the types of deductions or credits you claimed require verification, or you have a history of non-compliance).
Once you get your notice of assessment, however, your tax return could still be under reassessment at any time during the next 6 years based on investigations being conducted by the CRA.
How do I check my income tax refund status?
If you’re anxious about potential tax refund delays for your 2023 taxes, you can check your income tax refund status. Taxpayers should wait until the end of the CRA refund timeline for their type of return before they check their income tax refund status—that means 2 to 8 weeks for Canadian residents.
Then you can check your tax refund status in two ways:
1. By phone: Call the CRA’s Contact Centre at 1-800-959-8281 (Yukon, Northwest Territories, and Nunavut: 1-866-426-1527; outside Canada and the US: 613-940-8495). Make sure to have your social security number, personal information, and a Notice of Assessment ready.
2. Online: Just log into your CRA My Account and click on Notice of Assessment.
Why have I not received my tax refund?
The CRA lists a number of reasons why taxpayers might not get their refund even though they’re owed one. As per the CRA debt recovery program—which looks to “offset” debt taxpayers owe by withholding tax refunds or benefits like GST/HST payments—many delays involve outstanding government debt.
Here are some other reasons you may not receive your refund:
Outstanding GST/HST returns from a sole proprietorship or partnership
A garnishment order via the Family Orders and Agreements Enforcement Assistant Act
Certain kinds of outstanding federal, provincial, or territorial debts, such as student loans, social assistance benefit overpayments, immigration loans, training allowance overpayments, or employment insurance (EI) overpayments
A return of $2 or less
A miscalculation of your return that’s corrected through your notice of assessment
Questions about your past tax returns
If the CRA has questions about your current or past tax returns, it’s important that you respond promptly and provide any additional information or paperwork requested. Otherwise, your return may be left pending indefinitely until it’s resolved (which means you won’t get your tax refund anytime soon).
How do I resolve issues with my tax refund status?
If you disagree with your CRA notice of assessment, you should call the CRA to better understand the nature of the issue and to help resolve it. After that, you can make a formal objection at any time within 90 days of the date on your NOA or reassessment.
To file a formal objection online, find the “File a formal dispute (Notice of Objection)” section of your CRA My Account. You can also file by mail using form T400A, Notice of Objection or by writing the chief of appeals at your Appeals Intake Centre.
You must explain the reason for the objection, outline any relevant facts, and provide additional information or documentation. When preparing any materials to support your claim, add all relevant dates and details.
For example, if the CRA has claimed that you were in a common-law relationship or married certain years that you were not, relevant evidence to prove this might be a separation or divorce agreement, lease statements, or mortgage statements.
If the CRA is disputing multiple years of your returns, start by appealing the oldest return first and move forward.
How do I avoid delays of my CRA tax refund in the future?
Reports on social media about this year’s CRA debt recovery program suggest that the CRA is actively flagging situations where it wasn’t notified of changes to a taxpayer’s marital status. You must inform the CRA of any changes to your marital status by the end of the following month in which your status changed. The could be due to:
Getting married
Becoming common-law (cohabitating for 12 months)
Separating for more than 90 days
Divorce
Death of a spouse or common-law partner
Updating the CRA with your correct marital status is important because many federal and provincial benefits and relief programs are contingent upon household—and not personal—income, including things like benefit payments, GST refunds, and tax breaks.
The best practice is to make the CRA aware of changes in your marital status as soon as possible and ensure that you and your partner are filing your taxes using the same status. You can make this update online in your My Account or by calling the CRA at 1-800-959-8281 (Yukon, Northwest Territories, and Nunavut: 1-866-426-1527).
Some other things you can do to avoid delays in your tax refund status in the future:
File online: This reduces the timeline for receiving your notice of assessment from 8 weeks to 2 weeks.
Ensure accuracy: Since inaccurate information could cause your return to be flagged for additional review, it’s critical that the information in your return is correct.
Keep your CRA information up-to-date: Make sure your address, phone number, name, and marital status are updated with the CRA.
Sign up for direct deposit: You’ll get your refund faster if you sign up for direct deposit.
Does the CRA charge interest on refunds?
The CRA pays taxpayers monthly interest during the period they hold onto your refund if it’s later determined that it was owed to you all along. The good news is that the CRA’s interest on refunds is pretty generous:
Interest on non-corporate taxpayer overpayments: 8% APR
Interest on corporate taxpayer overpayments: 6% APR
The rates for CRA interest on refunds are updated quarterly.
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