Section 1 – Tax System
Income Tax Returns
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;
- He/she and his/her spouse elected to split pension income;
- He/she realized a taxable capital gain or disposed of a capital property (including a principal residence);
- He/she incurred a capital loss that can be applied in a subsequent year or deducted a capital gains reserve in the preceding year;
- He/she has to repay all or a portion of OAS or EI benefits received;
- He/she has not repaid all amounts withdrawn from an RRSP in connection with the HBP or the Lifelong Learning Plan;
- He/she is claiming a refund or a refundable tax credit (including the GST/HST credit) or wants to transfer the unused portion of his/her non-refundable tax credits to his/her spouse (see Section II);
- He/she wants to receive the CCB and the Family Allowance (previously the CAP);
- He/she wants to carry forward unused tuition fees to a future year;
- He/she has “earned income” for RRSP purposes and wants to update his/her maximum deductible for RRSP purposes;
- He/she has to make CPP/QPP contributions on self-employment or employment income, or EI contributions on self-employment income or other eligible income if he/she has elected to do so;
- He/she has to make a contribution in Quebec to the QPIP, HSF or QPPDIP;
- He/she has to make an additional contribution in Quebec for subsidized childcare (see Section II);
- The taxpayer or his/her spouse wants to receive the housing allowance or the solidarity tax credit (Quebec);
- In the last year, he/she received advance payments of a tax credit or benefit or the work premium;
- He/she operates an individual business and must pay annual registration fees for the Quebec enterprise register;
- He/she is the beneficiary of a trust that is resident in Canada but outside Quebec (Quebec).
Income tax returns must be filed no later than April 30 following the taxation year in question (June 15 if the taxpayer or his/her 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.
1 Although Saturday is not considered a holiday, the authorities generally treat it as such administratively.
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. The ARQ has a similar service: Consulting Tax Data.
This document is up to date as of August 1, 2019 and reflects the status of legislation, including proposed amendments at this date.