A lot can happen from year to year, creating uncertainty around your life and your tax situation. Maybe you started your own business, recently got married, moved provinces, or experienced some unforeseen COVID-related changes.
In any event, we want to ensure you feel supported when it comes to knowing whether you’ll get a tax refund, and what that might look like.
- Your tax refund depends on your total annual income, deductions, credits and how much tax you’ve paid.
- File your taxes online and sign up for direct deposit to receive your refund faster.
- Update your personal information with the CRA as your situation may change from year to year.
What is a tax refund?
Whenever the Canada Revenue Agency (CRA) collects more income tax from you than you owe, you’ll receive that amount as a refund. It’s like savings you didn’t know you had.
A refund is assessed based on your total income, the taxes you paid, and whether you have enough deductions and credits to warrant a refund.
As well, it never hurts to follow up with the CRA on unused deductions you can carry forward to future years.
Want to learn how to make the most of your tax return and get your maximum refund? Here’s how.
How do I calculate my tax refund?
If you’re using tax software such as TurboTax, your information will automatically be transferred to the correct line of the tax return and calculated accordingly.
Free Income Tax Calculator 2021
Fill in your income and expenses and see your refund or taxes owing estimate.
Here’s a high level breakdown on how to calculate your tax refund amount:
- Start by calculating your total annual income by adding all employment and investment earnings.
- Then apply all deductions you’re eligible for to that sum (taxable income) to reduce it.
- Finally, subtract your total credits (Line 48200) from your total payable amount, or taxes owed (Line 43500).
- If the resulting number is negative, enter it on Line 48400 of your return and you will get a tax refund in that amount. If it’s positive, you must pay this balance owing by the tax year deadline and will instead enter that amount on Line 48500.
When will I get my tax refund?
If you filed online using NETFILE, it can take up to 2 weeks to receive your tax refund. Signing up for direct deposit on CRA My Account will get you your money 3-5 days faster than receiving a cheque in the mail. If you filed by mail, it may take up to 8 weeks.
If you live outside Canada and file a non-resident personal income tax return, it may take up to 16 weeks to receive your refund.
Curious about when your tax refund will arrive? You can track it in your CRA My Account after the CRA receives your return. There you’ll find the date your return was received, when to expect your refund, and the exact amount.
Can the CRA withhold a tax refund?
In simplest terms, yes. There can be a variety of reasons for the CRA withholding your tax refund, including:
- If you have an outstanding balance on amounts owing
- If you failed to file for certain tax years
- If your personal details (address, email, etc.) are incorrect or out of date
Remember that even a small detail such as an incorrect apartment number can lead to delays in the CRA sending your tax refund. So it helps when all of your personal details are correct and up to date. You can make any updates by logging into your CRA My Account.