CRA Tax Filing Deadline 2023

There are penalties for failing to file your taxes in a timely manner in Canada, which is why it is vital to know exactly when your taxes are due this year. Not only will you face federal and provincial penalties if you file later, but interest charges will accrue on your owed balance. The following is a brief overview of filing deadlines along with a few pointers that explain what you should do if you are not able to pay your taxes by the set deadline.

Canada’s 2023 tax deadline

Deadline for Individual Tax Returns

All individuals in Canada must file their individual tax returns by April 30th every year. If you file by this date then you will not owe any penalties or interests. If you file by April 30th but do not pay the full amount due then you will owe interest. If April 30th falls on a Saturday or Sunday then individual returns will be due the following Monday. All employers are required to hand out T4 information slips well in advance of this deadline to ensure employees can properly file their taxes on time.

All mailed taxes must be postmarked by April 30th or the alternative assigned deadline and all electronically submitted returns must be completed and submitted by midnight of the time zone in which they are submitted.

Due Dates for Installment Payments

Self-employed citizens and those who anticipate paying taxes yearly often make four installment payments throughout the year to make the tax bill more palatable. Installment payments are due every year on March 15th, June 15th, September 15th, and December 15th. Any payment that is missed or late will be charged interest and penalties.

Deadline for Trusts

Trusts are required to file a T3 Trust-Income-Tax Return within 90 days of the close of the taxation year which traditionally follows the calendar year. Therefore, most trust tax deadlines fall on March 30th. However, under section 249.1 of the Income Tax Act, a trust that earns business income is allowed to follow the fiscal period of the business. In this case, the tax deadline will be 90 days past the end of the fiscal year. If a trust is fully distributed the date it is disbursed is considered the end of its taxation year and tax is due 90 days from it.

Penalties for Filing Late

The CRA discourages late filers by adding a flat 5% penalty charge on any balance that is owed as of the passed deadline. In addition, another 1% penalty fee is added every month that the balance remains unpaid. In addition, following the deadline, compound daily interest starts to accrue. It does not take very long for a small balance to grow if you are late on your yearly taxes.

Interest Charges When You Have a Balance

If you have a revolving balance then you will owe 1% in interest every month until the date that you actually pay the full amount due. This is in addition to the original 5% penalty fee that is assessed on the overdue balance after the deadline passes.

Options if You Cannot Pay in Full By the Deadline

If you cannot pay your taxes in full by your assigned deadline it is best to contact the CRA instead of ignoring the problem. If possible, using a line of credit to pay your taxes may offer you a lower interest rate, and can be a good option. Otherwise, depending on your current financial situation, you may be able to qualify for a CRA payment arrangement or tax relief program.

Payment arrangement

The CRA is willing to work with citizens who approach them honestly about tax debt. It is possible to make a payment arrangement that allows you to pay small amounts of your tax debt over time. However, interest will be calculated into your monthly payments. In order to be eligible for a payment arrangement, the CRA will require proof of income, assets, liabilities, and expenses.

Tax relief

The CRA has a special tax relief program for individuals who are facing extraordinary circumstances that prevent them from being able to make a tax payment. As part of the CRA, tax relief program interest or penalties can be waived partially or canceled fully. Circumstances that qualify for the tax relief program include a serious accident, serious illness, death in the immediate family, and/or severe mental and emotional distress.

Deadline for Self-Employed Tax Returns

People who are self-employed have an extended period of time to file their tax returns. They are granted until June 15th to file their returns, but any balance must be paid in full by April 30th to avoid penalties. Thus, if you anticipate paying taxes on your self-employment earnings from the previous year it is better to just bank on completing your tax return by April 30th to ensure you don’t receive any penalties on your total balance due. Interest will accrue on the amount owed starting on April 30th until the day you officially file your taxes.

Deadlines for Corporations

Each corporation has its own corporate tax deadline based on when its fiscal year ends. Essentially, each corporate business has six months after the end of its fiscal year to complete, file, and pay taxes. For example, if a corporation’s fiscal year closed on May 30th, they would have until November 30th to file and pay their taxes.

If the fiscal year ends on a date other than the first of the month, the corporate tax return is still due within a six month period. For example, if the fiscal year of your corporation ends on May 16th, the deadline becomes December 16th for Canadian entities.

Most corporations file their tax returns online to ensure quick processing. According to the Income Tax Act, corporations that gross over $1 million must file online unless they fall into a protected category which includes non-resident corporations, corporations that report in functional currency, or insurance corporations.

Deadlines for Deceased Individuals

The tax return of a deceased individual is referred to as the final tax return. The legal representative of the deceased is charged with submitting this final tax form to the CRA. All individuals who die between January 1st and October 31st of the tax year must have their final tax return prepared and submitted by April 30th. However, the final tax return of a person who died between Nov. 1st and Dec. 31st has a deadline of six months past the date of death. If the spouse of the deceased or the deceased person is self-employed the deadline will also be extended to June 15th, but interest will still accrue as of April 30th.

Any individual, corporation, or trust that earns income in Canada is responsible for paying taxes on an assigned date or they will face harsh penalties. It is in your best interest to educate yourself on applicable tax deadlines and plan accordingly. If payment is not possible, it is best to contact the CRA to make arrangements and offset potential penalties, interest charges, and fees.