CRA & Revenu Québec

The Heavy Price of Late Tax Returns

We all make our best effort to prepare and file our tax returns by the tax deadline but sometimes life just gets in the way.Whether your tax balance is zero, you’re getting a refund or you owe tax, the Canada Revenue Agency (CRA) requires you to file on time. Unfortunately, there can be consequences if you miss that deadline; Let’s walk through the details so you can avoid the heavy price of late tax returns! 

What is the Tax Return Deadline?

Generally, the tax return deadline is April 30th for personal income tax returns. When April 30th falls on a weekend, the tax deadline moves to the next business day. 

If you owe tax, your tax payment needs to be received by the CRA on or before the tax deadline. If you are sending your payment by mail, the envelope with your cheque in it must be postmarked by the tax deadline. 

If you have self-employment income, you don’t need to file your return until June 15th. But, if you owe tax, and self-employed people often do, the CRA still requires that you pay your tax balance by April 30th. 

I Filed Late. What are the Penalties?

If your tax balance is zero or you’re getting a refund, you can relax, as you won’t incur penalties for filing late. But, it is very important to note that filing late can impact your benefits; for example, if you qualify for the Canada Child Benefit and don’t file on time, you may not receive your payment.  

If you have a balance owing, the penalties for filing late can be quite steep. The penalty for filing late is 5% of your balance owing, plus an additional 1% for each month your return is late, up to 12 months. So, even if you have to file late, it’s still a good idea to file as soon as you can to avoid racking up that extra 1% penalty for every month you’re late. 

If you’re chronically late filing your tax return, you could face a more severe late filing penalty. If you’ve filed your tax return late in any of the previous three years, you could face a penalty of 10%, plus an additional 2% of the balance that you owe for each month your tax return is late, up to a maximum of 20 months. 

The CRA charges penalties on the balance you owe, so if you can afford to pay a portion of your balance, it’s a good idea to do so. That way, you’re only incurring penalties on the portion of the balance you didn’t already pay. 

Requesting Taxpayer Relief

In some cases, the CRA will waive or cancel late filing penalties. If you have to file your return late because of circumstances beyond your control, you can apply to have late filing penalties waived. 

To request a waiver, you’ll need to complete and mail form RC4288 Request for Taxpayer Relief. The form includes details on what circumstances could justify a waiver and explain what supporting documentation is needed to make a claim.