Tax Filing Dates
Tax returns are due on or before April 30th, unless you are self-employed or representing the estate of a deceased person. If you or your spouse or common-law partner is self-employed, your tax return must be filed by June 15th. However, if a balance is owed from the previous year, it must be paid by April 30th. In the situation of a deceased person, the filing date depends on the date of death and if the deceased or his / her spouse or common-law partner was employed in the past year.
Tax Penalties
The CRA will grant a taxpayer interest and penalty relief in certain specific situations including:
1. Inability to pay or financial hardship (basic living needs would not be met)
2. Health problems (serious illness, severe accident, depression, death)
3. Extraordinary circumstances (natural or man-made disasters)
4. Actions of the CRA (processing delays, errors)
The CRA declines many submissions for taxpayer relief from individual taxpayers who improperly submit their requests for relief. Do not attempt to go it alone.
Late Filed Returns
If taxes are not paid in a timely manner, commencing May 1st, interest begins to be compounded daily on any outstanding amounts. This interest is charged at a rate of 5%, with an additional 1% owing for each month outstanding, for a maximum of 12 months. However, if this is a second occurrence and late-filling penalties were charged in any of the three previous years, the penalty rate will be set at 10% of the current year’s balance owing, with an additional 2% charge each month for a 20 month maximum.
Unreported Income
Failure to report income may lead to penalties of 250% of the amount owing and daily interest. If a taxpayer cannot produce the amount owing, he or she may face time in prison in addition ruined credit, a criminal record and the garnishment of wages among other consequences.
Failure to Complete Information
A penalty of $100 is charged for each piece of information that is absent from a return. This penalty can be waived if the information required can only be obtained from a third-party and the taxpayer has been unable to collect this information.
Unpaid Tax
Late or incomplete tax payments are accompanied by interest that is set quarterly based on 90-day Treasury bill averages found in the former quarter and compounded daily.
Tax Pardons
Penalties and interest may be excused on occasion if the reason for filing late is beyond the taxpayer’s control. This may be due to illness, disaster and/or financial hardship due to loss of employment. Penalties can also be waived when conditions for the Voluntary Disclosure program are met.