2- Income Tax Return

Administration of the tax laws is based on a system of self-assessment, which means that every taxpayer is required to file an income tax return every year if:

• There is income tax payable or a refund is claimed;
• They and their spouse elected to split pension income;
• They realized a taxable capital gain or disposed of a capital property (including a principal residence);
• They incurred a capital loss that can be applied in a subsequent year or deducted a capital gains reserve in the preceding year;
• They want to start or continue receiving the GIS;
• They have to repay all or a portion of OAS or EI benefits received;
• They have not repaid all amounts withdrawn from an RRSP in connection with the HBP or the Lifelong Learning Plan;
• They opened an FHSA and would like to update their participation room for the plan;
• They are claiming a refundable tax credit (including the GST/HST credit) or want to transfer the unused portion of their non-refundable tax credits to their spouse (see Section II);
• They want to receive the CCB and the Family Allowance;
• They want to transfer tuition fees or carry forward the unused amount to a future year;
• They have “earned income” for RRSP purposes and want to update their maximum deductible for RRSP purposes;
• They have to make CPP/QPP contributions on self-employment or employment income, or EI contributions on self-employment income or other eligible income if they have elected to do so;
• They have to make a contribution in Quebec to the QPIP, HSF or QPPDIP;
• The taxpayer or his/her spouse wants to receive the housing allowance or the solidarity tax credit (Quebec);
• In the last year, they received advance payments of a tax credit, the Canada workers benefit, a tax benefit or the work premium;
• They operate an individual business and must pay annual registration fees for the Quebec enterprise register;
• They are the beneficiary of a trust that is resident in Canada but outside Quebec (Quebec).

Filing Deadlines

Income tax returns must be filed no later than April 30 following the taxation year in question (June 15 if the taxpayer or their spouse is reporting business income). If April 30 (June 15) falls on a statutory holiday Saturday¹ or Sunday, the returns have to be filed on the first working day thereafter. If returns are filed late, the taxpayer is subject to a 5% penalty charged by both governments on the balance unpaid as at April 30 and an additional penalty of 1% for each full month it is late, up to 12 months. The penalty may be more for repeat offenders.

File your income tax return within the prescribed times even if you are unable to pay the balance owing in order to avoid late filing penalties and delaying the payment of certain income-based benefits.

Persons who file more than ten income tax returns per year for compensation are required to submit their returns electronically.

Auto-fill My Return

The CRA offers a secure service which allows individuals to automatically fill-in parts of their income tax return. The information is taken from tax information slips filed for the individual and information available in the CRA’s files. Revenu Québec has a similar service: Downloading Tax Data.

¹ Although Saturday is not considered a holiday, the authorities generally treat it as such administratively.