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Most Canadians live their lives with only very infrequent contact with the tax authorities and are generally happy to keep it that way. Sometime between mid-February and the end of April 2025 the majority of Canadian taxpayers will file a return for 2024 with the Canada Revenue Agency. Once that return is processed, the CRA will issue a Notice of Assessment. Most taxpayers will then receive a tax refund, usually by direct deposit to their bank account, while in a minority of cases the taxpayer will have to pay a tax amount owing on or before April 30, 2025.

Most Canadians live their lives with only very infrequent contact with the tax authorities and are generally happy to keep it that way. Sometime between mid-February and the end of April 2025 the majority of Canadian taxpayers will file a return for 2024 with the Canada Revenue Agency. Once that return is processed, the CRA will issue a Notice of Assessment. Most taxpayers will then receive a tax refund, usually by direct deposit to their bank account, while in a minority of cases the taxpayer will have to pay a tax amount owing on or before April 30, 2025.

Sometimes, however, the process does not play out in quite that straightforward a way. In some cases, the CRA will have questions about information reported on the taxpayer’s return – perhaps an income amount reported does not match up with the amount reported to the CRA by the payor of that income. In other cases, the taxpayer may have claimed a deduction or credit, and the CRA wants the taxpayer to provide them with the receipt or other documentation to support that deduction or credit claim. In both cases, the CRA may contact the taxpayer to resolve the discrepancy or to obtain the information needed to finish processing the taxpayer’s return. In some cases, that contact will occur before the CRA issues the Notice of Assessment with respect to the taxpayer’s return, while in others it will not take place until after the Notice of Assessment has been issued.

While no one particularly likes hearing from the tax authorities, it is critical that the taxpayer respond to any inquiry from the CRA. Failing to do so will mean, at a minimum, that the processing of one’s tax return will be delayed, or worse, a claim made on the return will be denied because the taxpayer has not responded to requests to provide the CRA with supporting documentation.

The problem which arises for the taxpayer is determining whether a communication received is in fact a legitimate request from the CRA or is part of a scam, phishing, or fraud attempt. Scams in which fraud artists claim to be from the CRA have become so commonplace over the past decade or so that by now almost everyone has received a fraudulent communication which purports to be from the tax authorities and which requests that the taxpayer provide financial or other information – or threatens dire consequences if the taxpayer fails to make an immediate payment. And, in the past several years, those fraudulent communications have become more and more sophisticated and hard to detect

Receipt of any communication which purports to be from the tax authorities therefore puts the taxpayer in a quandary. A legitimate query from the CRA cannot be ignored, but responding to a fraudulent communication (which can be as simple as clicking on a link in a fraudulent text message or email) can result in significant financial losses, or even identity theft. The resulting (and understandable) level of concern and suspicion on the part of taxpayers has even led to instances in which taxpayers refuse to speak to genuine CRA employees who are contacting the taxpayer in connection with legitimate CRA enquiries.

Some of the difficulty, ironically, likely arises from the fact that the CRA now utilizes most of the currently available communications technology to contact taxpayers. It’s certainly more efficient, but that expanded use of communications technology has had the inadvertent effect of making it easier for scammers to fraudulently represent themselves as being from the Agency. The CRA now contacts taxpayers by phone, by regular mail, by automated voicemail, by email, and by text. About the only method the CRA doesn’t use in communicating with taxpayers is social media. Consequently, a taxpayer who receives a communication by phone, email, or text (the favourites of scammers) can’t automatically assume that such communication is not legitimate. To protect themselves, taxpayers need to know the purposes for which and circumstances in which the CRA will use different communications methods.

To that end, the CRA has made ongoing efforts, primarily through its website, to provide information on how it uses different communication methods to contact taxpayers. The Agency’s goal is two-fold: the first, of course, is to help taxpayers avoid becoming yet another victim of scams and frauds, and the second is to prevent situations in which taxpayers ignore legitimate communications from the Agency, having dismissed them as just another fraud or phishing attempt.

The following summary outlines just when the CRA will (and perhaps more importantly, when it will not) use a particular communication method to contact a taxpayer, and how to know whether a particular communication is in fact a legitimate one.

If you receive a phone call or an automated message

In a phone call, the CRA may ask for any of the following:

• personal information to verify the taxpayer’s identity, including their name, date of birth, or Social Insurance Number (SIN);
• details or additional information needed for the taxpayer’s tax account, such as receipts or supporting documents;
• tax returns which the taxpayer has not filed; or
• financial information, such as the taxpayer’s bank's name and location.

If the taxpayer has an outstanding debt owed to the CRA, the Agency may:

• ask for payment of any amount owing, using the CRA's payment options, or
• notify the taxpayer about possible legal actions to recover unpaid debts.

Finally, the CRA may notify a taxpayer by telephone or automated message about any of the following events:

• a tax return is being reviewed;
• a recent GST/HST registration is being reviewed;
• a GST/HST registration requirement is being reviewed;
• a CRA user ID and password have been revoked;
• a Notice of assessment or reassessment is being sent; or
• an audit process is being initiated.

Finally, the CRA may contact a taxpayer by phone or automated message to offer a service, including a reminder of an upcoming income tax filing or payment deadline or a tax instalment payment due date, or support to help the taxpayer access benefits and credits. It’s important to note that the Agency’s automated system only leaves a message and never includes or asks for taxpayer personal information. 

If you receive an email

The CRA will send an email to a taxpayer in only two situations:

• the taxpayer has registered for email notifications and is being notified that there is a new message to view in their CRA online accounts; or
• the taxpayer has requested, in a phone call or a meeting with a CRA client services agent, that a CRA link, form, or publication be sent.

When an email purporting to be from the CRA is received, it’s important to remember that legitimate emails from the Agency will not be from a specific user, will not ask the taxpayer to reply to the email and will not include a link asking the taxpayer to enter personal or financial information. Any emails which include any of these features should be deleted.

If you receive a text or instant message

The CRA does utilize text messaging, but only for very limited and specific purposes. The Agency only sends text messages as part of multi-factor authentication for all of its online sign-in services and only if the taxpayer enrolled in that service (like My Account) and selected the telephone option.

As well, the CRA will not use instant messaging such as Facebook Messenger or WhatsApp.

Phone calls from someone claiming to represent the CRA are among the most difficult communications for taxpayers to assess with respect to authenticity, as the recipient of the call has to make an on-the-spot determination about whether the unfamiliar voice on the telephone is, in fact, a CRA employee. There are, however, procedures and processes in place to help.

Legitimate CRA employees will identify themselves when they contact a taxpayer and will provide that taxpayer with their name and phone number to call them back, if asked. (Taxpayers should be aware that relying on call display to verify the source of the call is not a good idea, as scammers have been able to manipulate technology to “spoof” a legitimate CRA phone number.)

The Agency suggests that where there is any doubt about the identity of a caller claiming to be from the CRA, taxpayers consider taking the following steps to ensure that they are in fact speaking to a CRA employee.

1. Tell the caller you would like to first verify their identity.
2. Request and make a note of their:
   • name,
   • phone number, and
   • office location.
3. End the call. Then check that the information provided during the call was legitimate by contacting the CRA. The CRA now provides an online service (available at Verify it's the CRA calling - Scams and fraud - CRA - Canada.ca) which allows the taxpayer to enter the ten digit phone number which was provided by the caller, to find out whether it is in fact a legitimate CRA phone number.

Each of these verification steps should be taken before providing any information to the caller.

Especially during tax filing season, taxpayers often contact the CRA through one of its individual or business tax help lines, which are answered by call center agents. Each of those telephone services offers an automated callback service – when wait times reach a certain threshold (as they often do during the busiest times), the taxpayer is given the option of receiving a callback rather than continuing to wait on hold. Where the taxpayer chooses the callback option, they are provided with a randomized four-digit confirmation number. The CRA call center agent who returns the taxpayer’s call will repeat that number, so that the taxpayer can be certain that it is a CRA employee who is calling.

While scams and frauds and their perpetrators have been around for literally centuries, changes in technology mean that most taxpayers are now accustomed to and at ease with conducting much of their personal and financial lives online or on their cell phones, making it much easier to carry out such deceptions. And even newer technology, like AI, poses additional threats for the future. In such an environment, the taxpayer’s best protection is to double check in order to verify the legitimacy of any unsolicited contact received with respect to matters of tax or personal finances. Protecting one’s financial and personal information in this way is no longer just prudent, it’s a necessity.

When Canadians gather together the information slips, receipts, and other documents needed to prepare and file their annual income tax return, their biggest concern is likely whether completing that return will result in the need to pay a tax amount owing. Taxpayers who are recipients of Old Age Security (OAS) benefits share that concern, of course, but they can face an additional unpleasant result when completing their tax return – finding out that they are subject to the OAS recovery tax, or clawback.

When Canadians gather together the information slips, receipts, and other documents needed to prepare and file their annual income tax return, their biggest concern is likely whether completing that return will result in the need to pay a tax amount owing. Taxpayers who are recipients of Old Age Security (OAS) benefits share that concern, of course, but they can face an additional unpleasant result when completing their tax return – finding out that they are subject to the OAS recovery tax, or clawback.

To understand how the OAS clawback works, a bit of background is helpful. The Old Age Security program is one of the two major federal retirement income programs in Canada – the other being the Canada Pension Plan. The two programs differ in two significant ways. First, while the Canada Pension Plan is funded by employer and employee contributions, OAS benefits are financed entirely out of general government revenues. Second, CPP retirement benefits are based on the amount of contributions made throughout the recipient’s working life and are unaffected by their income while receiving those retirement benefits. OAS benefits, however, can be recovered, or clawed back, by the federal government where the recipient’s income exceeds a prescribed threshold.

Most taxpayers, especially those over 65, have heard of the OAS clawback, but few are familiar with how it works in practice. While the rules governing the administration of the clawback can be confusing, the concept is a (relatively) simple one. Anyone who receives OAS benefits during a tax year and has net income for that year over a specified dollar amount threshold is required to repay a portion of the OAS benefits which were received during that year. Generally, that repayment is effected by reducing the amount of OAS benefits paid to the recipient throughout the next benefit year.

For example, an individual who receives full OAS during 2024 and has net income for the year over $90,997 will be subject to the clawback. They must repay OAS amounts received at a rate of 15 cents (or 15%) of every dollar of income over the clawback income threshold, as in the following simplified example.

The OAS clawback threshold for 2024 is $90,997.

If the individual’s income in 2024 was $98,000, then repayment would be 15% of the difference between $98,000 and $90,997:

$98,000 - $90,997 = $7,003

$7,003 x 0.15 = $1,050.45

The individual would have to repay $1,050.45 for the July 2025 - June 2026 period.

The federal government becomes aware of an individual’s income for 2024 only once the tax return for that year is filed, usually by April 30 of 2025. At that time, it will become apparent that $1,050.45 in OAS benefits received must be repaid. Consequently, in the following benefit year (which will run from July 2025 to June 2026), OAS benefits received will be reduced by $87.53 per month ($1,050.45 divided by 12 months).

This year, the OAS clawback affects only individuals who have an annual income of at least $90,997, much higher than the average income for a senior in Canada, and it’s arguable that at such income levels the clawback requirement does not impose any real financial hardship. Nonetheless, the OAS clawback is a perpetual irritant to those affected by it, perhaps because of the sense that they are being penalized in retirement for having lived frugally or been good managers of their finances during their working years, in order to put aside savings for a financially comfortable retirement, or to leave an inheritance for their children.

While any sense of grievance can’t alter the reality of the OAS clawback, there are strategies which can be put in place to either minimize or, in some cases, entirely eliminate one’s exposure to that clawback. Some of those planning considerations are better addressed earlier in life, prior to retirement; however, it’s not too late, once one is already receiving OAS, to make arrangements to avoid or minimize the clawback in future years.

In all cases, no matter what strategy is employed the goal, as it is with much of individual tax planning, is to “smooth” one’s income from year to year, so that net income for each year comes in under the OAS clawback threshold and, not incidentally, minimizes exposure to the higher federal and provincial income tax rates which in most cases apply once taxable income reaches between $90,000 and $100,000.

The starting point for taxpayers who are approaching retirement is to determine how much income will be received from all sources during retirement, based on CPP and OAS entitlements, any savings accrued through an RRSP, and any amounts which may be received from a private pension plan. For planning purposes, the age at which those income streams will come “online” can then be determined and arranged to produce the best result for both tax and OAS clawback purposes.

Anyone who has an RRSP must begin receiving income from those savings in the year after that person turns 71. However, it’s possible to begin receiving income from an RRSP at any time. Similarly, an individual who is eligible for CPP retirement benefits can begin receiving those benefits anytime between age 60 and age 70. OAS benefits can be received as early as age 65 or deferred up until age 70. For both CPP and OAS, the benefit amount increases for each month that receipt of that benefit is deferred.

Once the amount of annual income is determined, strategies to smooth out that income can be put in place. Those strategies could include arranging to receive OAS and CPP benefits at an earlier date or withdrawing amounts from an RRSP prior to age 71. The latter strategy will reduce the total amount within the RRSP and so thereby reduce the likelihood of having a large “bump” in income when required withdrawals kick in at age 72.

Taxpayers are sometimes understandably reluctant to take steps which they view as depleting their RRSP savings, but receiving income from an RRSP doesn’t mean spending that income. While tax has to be paid on any withdrawals (no matter what the taxpayer’s age), the after-tax amounts received can be contributed to the taxpayer’s tax-free savings account (TFSA), where they can compound free of tax. And, when the taxpayer has need of those funds, in retirement, they can be withdrawn free of tax and they won’t count as income for purposes of the OAS clawback.

The same strategy works for taxpayers who have opened a registered retirement income fund, or RRIF. All taxpayers who have an RRSP are required to collapse that RRSP by the end of the year in which they turn 71 and most taxpayers then transfer the balance of funds in the RRSP to an RRIF. Once an RRIF is opened, the holder of the RRIF is required to withdraw a specified percentage of funds from the RRIF each year (with that percentage increasing each year), and to pay tax on those withdrawals. That’s the case even where the taxpayer has no need of the funds and even where, as with the OAS clawback, receiving those funds can affect OAS benefit eligibility.

Taxpayers who have an RRIF and are age 65 or over can’t avoid making the withdrawal and paying tax on such amounts. However, where there is no immediate need for those funds, they can (like RRSP withdrawals) be contributed to the taxpayer’s TFSA. And, once again, those amounts can be invested and can grow tax-free. (If amounts withdrawn from an RRIF were invested outside of any tax sheltered plan, those investment gains would be fully taxed in the year in which they are received.) When amounts (whether original contributions or investment returns) are later withdrawn from the TFSA, no income tax is payable on those amounts and the amounts received will not be included in income for purposes of the OAS clawback.  

Taxpayers who are married can also “even out” their income by using pension income splitting, so that neither of them has sufficient income to be affected by the clawback.  Using pension income splitting, the spouse who has income over the OAS clawback threshold re-allocates the “excess” income to their spouse on the annual return, and that income is then considered to be income of the recipient spouse, for purposes of both income tax and the OAS clawback. To be eligible for pension income splitting, the income to be reallocated must be private pension income, which is generally income from an RRSP or RRIF, or from an employer sponsored pension plan. CPP and OAS benefit amounts do not qualify for pension income splitting.

There are two reasons why pension income splitting is a particularly attractive strategy for avoiding or minimizing the OAS clawback. First, there is no need to actually change the source or amount of income received by each spouse, as the reallocation of income is “notional”, existing only on the return for the year. Second, no decision has to be made on pension income splitting until it’s time to file the return for the previous year, meaning that spouses can easily calculate exactly how much income has to be reallocated to produce the desired result. More information on the kinds of income eligible for pension income splitting, and the mechanics of the process, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting.html.

While the concept of planning to smooth out income in order to minimize taxes in retirement and avoid the OAS clawback is straightforward, most retirees have multiple sources of income and determining just how much income will be available from each source in each future year is difficult. However, the federal government provides an extremely useful online calculator which can be used to make that determination. The particular value of that calculator is that, based on inputs provided by the user, it enables that user to run “what-if” scenarios to determine the effect of, for instance, receiving OAS and CPP benefits at the earliest possible time, or by deferring receipt of those benefits for one, two, or more years. Based on the inputs provided by the user, the calculator will determine the amount of income which will be received annually from each income source in each future year. That calculator is available on the federal government website at https://srv111.services.gc.ca/generalinfo/index.

Detailed information on the OAS clawback can be found on the same website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/repayment.html.

Most taxpayers sit down to do their annual tax return (or wait to hear from their tax return preparer) with some degree of anxiety. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.

Most taxpayers sit down to do their annual tax return (or wait to hear from their tax return preparer) with some degree of anxiety. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.

Most taxpayers are, of course, hoping for a refund – the bigger the better. And for most taxpayers, that hope is realized. Of the approximately 5.5 million tax returns filed with the Canada Revenue Agency (CRA) between mid-February and March 17 of 2025, 67% resulted in the payment of a refund to the taxpayer (with an average refund of $2,000), while only 13% resulted in a tax amount owed. (The remaining 20% were nil returns, resulting in neither a refund nor a tax balance owed.) However, while only a small percentage of returns result in a tax balance owed to the government, that’s not much consolation to the 13% of tax filers who find themselves in that situation.

The worst-case scenario, for all taxpayers, is to find out that they are faced with a large tax bill and an imminent payment deadline, and that they just don’t have the funds needed to make the required payment by that deadline. This year, that payment deadline is Wednesday April 30, 2025 for ALL individual taxpayers (including self-employed taxpayers and their spouses who have until Monday June 16, 2025 to file their returns, and individual taxpayers who are reporting capital gains or capital losses for the 2024 tax year, who will not be assessed late-filing penalties or interest provided their returns for 2024 are filed on or before Monday June 2, 2025).

The April 30 payment deadline is inflexible and, where payment in full is not made on or before that date, interest charges on any unpaid balance will be levied by the CRA beginning on May 1, 2025. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates – the rate charged from April 1 to June 30, 2025 is 8.0%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing – for example, through a line of credit or low-interest credit card – in order to pay any taxes owing by the April 30, 2025 deadline.

Where the taxpayer can’t pay their tax bill out of current resources and is unable to borrow the funds to do so, there is another option. Like most creditors, the CRA would rather get paid on time and in full, but the Agency’s ultimate goal is to collect the full amount of taxes owed. If a tax bill can’t be paid on time, in full or in part, the Canada Revenue Agency is open to making a payment arrangement with the taxpayer, providing them with the option of paying an amount owed over time, plus interest.

There are two avenues available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s automated TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide their full name and address, social insurance number, and date of birth and to have the Notice of Assessment for the last tax return for which the taxpayer filed. For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2023 tax year. The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m., Eastern time.

Taxpayers who would rather speak directly to a CRA employee can call the Agency’s debt management call centre at 1-888-863-8657 from 7 a.m. to 8 p.m. Eastern Time Monday to Friday. Where there is a long wait time, the taxpayer can request that a CRA representative return the call, or can complete an online form (available at https://apps.cra-arc.gc.ca/ebci/iesl/showClickToTalkForm.action) requesting a callback from a CRA agent.

Taxpayers who have registered for the CRA’s online service My Account can also log into their account to schedule a series of pre-authorized debits from their bank account which will discharge their tax debt. My Account is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html.

Finally, regardless of the taxpayer’s circumstances, there is one strategy which is in all circumstances the wrong choice. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. That’s the wrong decision, and potentially a very costly one. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate tax penalty imposed of 5% of the outstanding tax amount – and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each full month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In the worst-case scenario, the total penalty charges can reach 50% of the tax amount owed – and that doesn’t count the compound interest which is levied on all penalty amounts, as well as on all unpaid taxes. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time and, where necessary, contact the CRA to make an arrangement to pay tax amounts owed over time.

Detailed information on the options available to taxpayers who can’t pay their taxes on time and in full can be found on the CRA website at  Call us if you can't pay in full or on time - Debt collection at the CRA - Canada.ca and https://www.canada.ca/en/revenue-agency/services/payments-cra/payment-arrangements.html.

Notwithstanding the considerable complexity of the Canadian income tax system, there is one rule which applies to every individual taxpayer living in Canada, regardless of location, income, age, or circumstances. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2024 must be remitted to the Canada Revenue Agency (CRA) on or before Wednesday April 30, 2025. No exceptions and, absent extraordinary circumstances, no extensions.

Notwithstanding the considerable complexity of the Canadian income tax system, there is one rule which applies to every individual taxpayer living in Canada, regardless of location, income, age, or circumstances. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2024 must be remitted to the Canada Revenue Agency (CRA) on or before Wednesday April 30, 2025. No exceptions and, absent extraordinary circumstances, no extensions.

It is very much in the CRA’s interest to make paying taxes as simple and as straightforward as it can be and so the Agency offers individual taxpayers a wide range of choices when it comes making that payment. There are, in fact, no fewer than eleven separate options available to individual residents of Canada in paying their taxes for the 2024 tax year. The rules and procedures for the methods most frequently used by individual taxpayers are outlined below: the first four options involve payment by electronic means, while the last three describe those available to taxpayers who would prefer to make their payments in person, or by sending a cheque to the CRA.

Pay using online banking

Millions of Canadians transact most or all of their banking using the online services of their particular financial institution. The list of financial institutions through which a payment can be made to the Canada Revenue Agency is a lengthy one (available at Pay online with your bank or credit union - Payments to the CRA - Canada.ca), and includes all of Canada’s major banks and credit unions.

The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems are configured. What’s important to remember is that the nature of the payment – i.e., tax balance owed on filing, as distinct from current year tax instalment payments – must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account for the correct taxation year.

It’s not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.

Using the CRA’s My Payment

The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.

What is necessary is that the taxpayer have an activated debit card with a VISA Debit or Debit MasterCard logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. It’s not possible to use a credit card to make a payment on My Payment; in addition, cards bearing only the Interac Debit logo, which were formerly eligible, are no longer accepted on My Payment.

Anyone intending to use My Payment should also confirm that the amount of any payment to be made is within any transaction limits imposed by their particular financial institution.

A list of participating financial institutions for each type of card and more details on this payment method can be found at https://www.canada.ca/en/revenue-agency/services/e-services/payment-save-time-pay-online.html.

Payment by credit card, PayPal, or Interac e-transfer

While it’s possible to pay one’s taxes using a credit card, PayPal or Interac e-transfer, such payments can be made only through third-party service providers (that is, payments by those methods cannot be made directly to the Canada Revenue Agency), and such third-party service providers will impose a fee for the service.

There are currently only three service providers through which individual income tax amounts owed can be paid – Pay Simply, Plastique, and TelPay. Links to each such service are available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-credit-card.html.

Payment by pre-authorized debit

It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing the Agency to debit a specific bank account for an amount of taxes owed, on dates specified by the taxpayer.

Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to schedule a PAD of any balance of taxes owed for the 2024 tax year. However, any such payments must be scheduled at least five business days before the date the payment is to be made – i.e., April 30, 2025. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.

There is also another option for taxpayers who have their return prepared and E-FILED by an authorized electronic filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Such an arrangement is only for the payment of a current year tax balance and can’t be used for other payments like instalment payments of tax. Details on how to set up a pre-authorized debit arrangement, whether for a single payment or for recurring payments, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.

Paying in person at your financial institution

For those who don’t use online banking, or simply prefer to make a payment in person, it’s possible to pay a tax amount owed at a bank or credit union. Doing so, however, requires that the taxpayer have a specific personalized remittance form – the T7DR, Amount owing Remittance Voucher

If the taxpayer has not received the required remittance form from the Canada Revenue Agency, it’s possible to download and print that form from the CRA website. Instructions on how to do so can be found on that website at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.

Paying at a Canada Post outlet

All Canada Post outlets can receive payments of individual income tax balances owed, in cash or by debit card, but will impose a service charge for doing so. A specific form is needed to make tax payments at Canada Post outlets.

In this case, the taxpayer must have a QR code which contains the information needed for the CRA to credit the amount paid to the taxpayer’s account.

While a QR code is sometimes included on remittance forms sent to the taxpayer by the CRA, it’s also possible to generate a QR code online through the CRA website. A link to instructions on how to do so can be found on that website at https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/pay-canada-post.html.

Paying by cheque

While it’s not as common anymore, it’s still possible to pay any tax balance owed on filing by cheque, as outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-cheque.html.

Such cheques are made payable to the Receiver-General for Canada, and are mailed, together with the required remittance form, to the CRA, using the address found on the back of the payment remittance form. As is the case with payments made at a financial institution, the taxpayer can print such a remittance form from the CRA’s website. Instructions on how to do so can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.

The CRA also suggests that, where payment of taxes owed is made by cheque, the taxpayer should include their social insurance number on the memo line found on the front of the cheque and, in addition, provide information about the tax account (that is, 2024 income tax balance owed on filing) to which the payment should be applied.  Doing so will help ensure that the payment is credited to both the correct taxpayer and the correct tax account of that taxpayer.

A decision on what method to use to pay one’s taxes includes another important consideration of which most taxpayers are unaware. Under longstanding Canada Revenue Agency policy, the CRA considers that a payment is actually made on the date on which it is received by the Agency. However, depending on the payment method chosen, that date of receipt usually isn’t the same day the payment is made by the taxpayer, and it can be as much as several days later. And, of course, where payment is made close to the payment deadline, that delay can mean the difference between a timely payment and one that is late and incurs interest charges.

Helpfully, the CRA provides information, for each payment method, on both which types of tax payments can be made using that method and how the date of receipt is determined for that particular method. That information can be found on the CRA’s website at Canada Revenue Agency https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/make-payment.html.

Finally, once payment has been made, by any payment method, the CRA provides taxpayers with an online method for confirming that a payment has been received and applied to the taxpayer’s account, through the Agency’s My Account service. That service is available at https://www.canada.ca/en/revenue-agency/services/payments-cra/confirm-payment.html. Taxpayers who have not signed up for My Account can confirm that their payment has been received and applied to their 2024 tax account by calling the CRA’s Individual Income Tax Enquiries Line at 1-800-959-8281.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Corporate:
Issue #71 Corporate

Personal:
Issue #71 Personal

A few decades ago retirement, for most Canadians, was an event which marked the change from full-time work to not working at all. Usually, that transition took place at age 65, following which the new retiree would begin to receive Canada Pension Plan (CPP) and Old Age Security (OAS) benefits, and perhaps monthly payments from an employer-sponsored pension plan.

A few decades ago retirement, for most Canadians, was an event which marked the change from full-time work to not working at all. Usually, that transition took place at age 65, following which the new retiree would begin to receive Canada Pension Plan (CPP) and Old Age Security (OAS) benefits, and perhaps monthly payments from an employer-sponsored pension plan.

While that scenario is still possible, it no longer represents the retirement reality (or the retirement plan) of most Canadians, to such an extent that the word “retirement” no longer has a single meaning. Rather, it’s now the case that each individual’s retirement plans look a little different than anyone else’s. Some will take a traditional retirement of moving from a full-time job into not working at all, while others may stay working full-time past the traditional retirement age of 65. Still others will leave full-time employment at some point but will continue to work part-time, either out of financial necessity or simply from a desire to stay active and engaged in the work force.

The increasingly flexible nature of retirement plans is reflected in changes made over the past couple of decades to Canada’s government-sponsored retirement income programs, particularly the Canada Pension Plan. Every Canadian worker (employed or self-employed) contributes to the Canada Pension Plan starting at age 18 and continuing throughout his or her working life. The amount of contributions made is based on the individual’s income for the year, and total contributions made will determine the amount of CPP retirement benefit for which the individual will be eligible.

It’s possible to begin receiving Canada Pension Plan benefits as early as age 60 and as late as age 70, with the amount of benefit increasing with each month that receipt of benefits is deferred past age 60. Many Canadians now choose to begin receiving their CPP retirement benefit while continuing to participate, part-time or full-time, in the work force.

At one time, beginning to receive CPP retirement benefits meant that, even for those who chose to remain in the work force, no further CPP contributions were allowed. In 2012 that changed, with the introduction of the CPP Post-Retirement Benefit, or PRB. The availability of the PRB means that those who are aged 65 to 70 and continue to work while receiving CPP retirement benefits must decide whether or not to continue making CPP contributions. Such individuals who make the choice to continue to contribute to the Canada Pension Plan will see an increase, as the result of the PRB, in the amount of CPP retirement benefit they receive each month for the remainder of their lives.

The rules governing the availability of the PRB differ, depending on the age of the taxpayer. In a nutshell, an individual who is receiving the CPP retirement benefit and who continues to work will be subject to the following rules:

• Individuals who are 60 to 65 years of age and continue to work are required to continue making CPP contributions.
• Individuals who are 65 to 70 years of age and continue to work can choose not to make CPP contributions. To stop contributing, such an individual must fill out Form CPT30 (https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt30.html). A copy of that form must be given to the individual’s employer and the original sent to the Canada Revenue Agency (CRA). An individual who has more than one employer must make the same choice (to continue to contribute or to cease contributions) for all employers and must provide a copy of Form CPT30 to each employer.
  
  A decision to stop contributing can be changed and contributions resumed, but only one such change can be made per calendar year. To make that change, the individual must complete section D of CRA Form CPT30 https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt30.html, give one copy of the form to their employer(s), and send the original to the CRA.
• Individuals who are over the age of 70 and are still working cannot contribute to the CPP.

For individuals aged 65 to 70 who are still working, a decision on whether to continue making CPP contributions is, essentially, a cost/benefit analysis – each individual must determine whether the cost of making such contributions is justified by the increase in CPP retirement benefits which will result. To make that calculation, it’s necessary to start by knowing how much continuing contributions will cost. And, beginning with the 2024 tax year, the decision on whether to continue contributions to the CPP will be made more complex for some individuals by the introduction of “second tier CPP contributions”.

The contribution structure and amounts for 2025 are as follows.

• In 2025, each employee contributes first tier contributions of 5.95% of income earned, to a maximum first tier CPP contribution amount of $4,034.10.
• In 2025, individuals who have employment or self-employment income of more than $71,300 will be required to pay additional CPP contribution amounts of 4% of income between $71,300 and $81,200, with the maximum second tier contribution amount (for employees) being $396.
• For self-employed individuals (who must pay both the employer and employee portions of CPP contributions), the maximum first tier CPP contribution in 2025 will be $8,068.20 and the maximum second tier contribution will be $792. 

For individuals who are trying to decide whether to continue contributing to the CPP, there are some general rules of thumb which can be useful in making that determination. Generally speaking, continuing to contribute makes the most sense for younger individuals whose current CPP retirement pension is significantly less than the maximum allowable benefit (which, in 2025, is $1,433 per month), as making such contributions will mean an increase in the individual’s CPP retirement benefit each month for the rest of their life. Conversely, for individuals who are already receiving the maximum CPP retirement benefit, or even close to it, there is likely little or no benefit to be derived from continuing to contribute. Those individuals who are self-employed will need to factor in the reality that they will be required to pay both the employer and employee contribution amounts. Finally, those whose income is more than $71,300 in 2025 will need to consider the additional cost of making second tier CPP contributions.

More individualized information can be obtained from a very useful online tool provided by the CRA. That online tool – the Retirement Income Planner – includes an option which provides users with an estimate of how much PRB they can expect to receive in each subsequent year if they continue to contribute to the CPP. That Retirement Income Planner is available on the CRA website at  General Information - Canada.ca.

Where an individual decides that continuing to make CPP contributions makes sense in their circumstances, and the required forms are completed and submitted, the amount of any CPP post-retirement benefit earned will automatically be calculated by the federal government (no application is required), and the individual will be advised of any increase in the monthly CPP retirement benefit each year. The PRB will be paid to that individual automatically the year after the contributions are made, effective January 1 of that second year. Since the federal government doesn’t have all of the information needed to make such calculations until T4s and T4 summaries are filed by the employer by the end of February, the first PRB payment is usually made in a lump-sum amount in the month of April. That lump-sum amount represents the PRB payable from January to April. Thereafter, the PRB is paid monthly and combined with the individual’s usual CPP retirement benefit in a single payment.

More information on the PRB generally is available on the same website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement.html.

While it’s true that the best year-end tax planning starts on January 1 of the tax year, the reality is that most Canadians don’t turn their attention to their tax situation for 2024 until the spring of 2025, when the deadline for filing a tax return for 2024 approaches. And while that means that there is plenty of time to get the return prepared and filed, it also means that the most significant opportunities to reduce or minimize the tax bill for 2024 are no longer available. Almost all such tax-planning or saving strategies, in order to be effective for 2024, must have been implemented by the end of that calendar year.

While it’s true that the best year-end tax planning starts on January 1 of the tax year, the reality is that most Canadians don’t turn their attention to their tax situation for 2024 until the spring of 2025, when the deadline for filing a tax return for 2024 approaches. And while that means that there is plenty of time to get the return prepared and filed, it also means that the most significant opportunities to reduce or minimize the tax bill for 2024 are no longer available. Almost all such tax-planning or saving strategies, in order to be effective for 2024, must have been implemented by the end of that calendar year.

The fact that the clock has run out on most major tax-planning opportunities for 2024 doesn’t, however, mean that there are no tax-saving strategies left. At this point, there are a couple of ways to minimize the tax hit for 2024 – by claiming all available deductions and credits on the return, and also by making sure that those deductions and credits are structured and claimed in the way which will give the taxpayer the greatest tax benefit.

In some cases, a claim for a tax deduction or credit can only be made on the return for the year in which the expense is incurred, while in other cases claims can be made for expenses incurred in the previous tax year or even as far back as five years previously.  Consequently, getting the best tax result on one’s return requires an assessment of which deductions and credits are available to claim in the current year, whether some or all of them can be carried forward and claimed in a future year, or claimed in the current year by another family member, and whether it makes sense to do so. It may seem counterintuitive, or even illogical, to not claim every available deduction and credit in order to obtain the best possible tax result for the year. However, in some cases (albeit for different reasons) there are situations in which it makes sense to defer an available claim to a future year, or to transfer the claim to another family member.

Those considerations apply to two of the most common tax credit claims made by Canadian taxpayers – the charitable donation tax credit and the medical expense tax credit.

Charitable donation tax credit

Taxpayers are entitled to make a claim on the annual tax return for charitable donations made in the current (that is, 2024) year or any of the previous five years. The reason it can sometimes makes sense not to claim a charitable donation in the year it was made arises from the way in which the charitable donations tax credit is structured to order to encourage higher donations.

That credit, at both the federal and provincial/territorial levels, is a two-tier credit. Federally, the first $200 in donations receives a credit of 15% of the total donation, or $30. However, donations above the $200 level receive a credit equal to 29% of the donation amount over $200.

Take, for example, a taxpayer who makes a regular contribution to a favourite charity of $100 each month, or $1,200 per year. Where they claim that donation on the annual return each year, that claim will result in a federal credit of $320 ($200 times 15%, plus $1,000 times 29%). Where, however, the same taxpayer defers the claim to the following year and claims a total of $2,400 in donations on a single return, they will receive a federal credit of $668 ($200 times 15%, plus $2,200 times 29%). Where the donations are accumulated and claimed once every five years, the federal credit received will be $1,712 ($200 times 15%, plus $5,800 times 29%). Under each scenario, the total charitable donation made is the same, but the amount of credit received increases with each year that the claim is deferred. Since each of the provinces and territories provides a two-tier credit (at different rates, depending on the jurisdiction), the same result will be seen when calculating the provincial/territorial credit.

It's important to note as well that charitable donations made by either spouse can be combined and claimed on the return for one of those spouses, thereby increasing the amount of charitable donations available to claim and possibly the amount of credit which can be received.

Medical expenses

Notwithstanding our publicly funded health care system, there are a great (and increasing) number of medical and para-medical expenses for which coverage is not provided and which must be paid on an out-of-pocket basis. In many instances, it’s possible to claim a medical expense tax credit for those out-of-pocket costs.

The federal credit for such expenses is 15% of allowable expenses. As is usually the case, the provinces and territories also provide a credit for the same expenses, albeit at different rates.

Many taxpayers, with some justification, find the rules on the calculation of a medical expense tax credit claim confusing. First, there is an income threshold imposed. Medical expenses eligible for the credit are qualifying expenses which exceed 3% of net income, or (for 2024) $2,759, whichever is less. Put more practically, for 2024, taxpayers who have net income of $92,000 or more can claim medical expenses incurred over $2,759. Those with lower incomes can claim medical expenses which exceed 3% of that lower net income. For instance, a taxpayer having $35,000 in net income could claim qualifying medical expenses incurred over $1,050 (3% of $35,000).

The other aspect of the medical expense tax credit which can be confusing is the calculation of the optimal time period. Unlike most tax credit claims, the medical expense tax credit can be claimed for qualifying expenses which were paid in any 12-month period ending during the tax year. While confusing, such rule is beneficial, in that it allows taxpayers to select the particular 12-month period during which medical expenses (and therefore the resulting credit claim) is highest. The only restrictions are that the selected 12-month period must end during the calendar year for which the return is being filed and, of course, any expenses which were claimed on a previous return cannot be claimed again. 

While only expenses which exceed the $2,759/3% threshold may be claimed, it’s also possible to aggregate expenses incurred within a family and make a single claim for those expenses on the return of one spouse. Specifically, the rules allow families to aggregate medical expenses incurred for each spouse and for each child who was under the age of 18 at the end of 2024. While medical expenses incurred by a single family member might not be enough to allow them to make a claim, aggregating those expenses is very likely (especially for a family that does not have private medical insurance coverage) to mean that total expenses will exceed the applicable threshold.

In determining who will make the medical expense tax credit claim for a family, there are two points to remember. Since total medical expenses claimable are those which exceed the 3% of net income/$2,759 threshold, whichever is less, the greatest benefit will be obtained if the spouse with the lower net income makes the claim for total family medical expenses. However, the medical expense credit is a non-refundable one, meaning that it can reduce tax otherwise payable, but cannot create (or increase) a refund. Therefore, it’s necessary that the spouse making the claim have tax payable for the year of at least as much as the credit to be obtained, in order to make full use of that credit.

Finally, the number and variety of medical expenses which an individual or family might have to pay for out of pocket are almost limitless, and the rules governing which can be claimed and in what circumstances are very specific and, often, not necessarily intuitive. In some cases, for instance, a doctor’s prescription will be required, while in others it will not. The very long list of medical expenses eligible for the credit, and any ancillary requirements, such as a prescription, can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html.

While the tax return form that Canadians prepare and file each spring might look identical to the form that was used the previous year, the reality is that our tax system is constantly changing, and that change is reflected in amendments made to each year’s tax return form, which in turn affect the tax situation of every Canadian taxpayer.

While the tax return form that Canadians prepare and file each spring might look identical to the form that was used the previous year, the reality is that our tax system is constantly changing, and that change is reflected in amendments made to each year’s tax return form, which in turn affect the tax situation of every Canadian taxpayer.

Some of the changes to the annual return happen “automatically”, as Canadian federal income tax brackets and tax credits are, by law, indexed to inflation. Consequently, each year, credit amounts and tax brackets increase to reflect changes in the Consumer Price Index. For 2024, those amounts have increased (by comparison to 2023) by 4.7%.

Other changes to the return arise for a variety of reasons. New tax credit or benefit programs are introduced, existing programs are tweaked or amended in some way, or temporary credit or benefit programs expire. As well, technical amendments are made every year to the Income Tax Act, which can affect how taxable income is determined or how tax payable is calculated.

Unusually, probably the most significant tax change for 2024 is a tax change which will not appear on the 2024 return. In its 2024-25 budget, the federal government announced that, effective as of June 25, 2024, the inclusion rate for capital gains (meaning the percentage of capital gains included in income) would be increased from one-half to two-thirds on all capital gains realized by corporations, and on capital gains over $250,000 realized by an individual in a single year. However, on January 31, 2025, Finance Canada announced that the implementation date for that change would be deferred to take effect, not on June 25, 2024, but on January 1, 2026.

Given that the change in the capital gains inclusion rate applies only to individuals who realize more than $250,000 in capital gains in a year, the deferral will impact a very small number of Canadian taxpayers. Nonetheless, for those individuals, the deferral of the increase in the capital gains inclusion rate will have a significant impact on their taxable income amount – and therefore their tax payable amount for 2024.

Another change, which does take effect for 2024 (and subsequent years), is likely to affect a far greater number of taxpayers – specifically, those who engage in e-commerce activities on any of the available digital platforms. Under Canadian tax law, the worldwide income of a Canadian resident, from any source, is income which must be reported on the annual tax return, and on which tax must be paid. However, until 2024, Canadian tax authorities seeking to ensure compliance with Canadian tax reporting and tax payment rules had very few means by which income earned through the digital economy could be tracked.

Beginning with the 2024 tax year, however, operators of e-commerce platforms are required to report to the CRA amounts earned by Canadian residents on those platforms, where the Canadian resident is a “reportable seller”. For these purposes, a reportable seller is someone who engages in 30 or more transactions during the year and receives more than $2,800 from those transactions. A copy of the information provided to the CRA (which can include the seller’s name, address, and social insurance number and their bank account numbers) was sent to each Canadian-resident reportable seller by the end of January 2025, and that information must be reported on the return for 2024. More information on how to do so can be found on the CRA website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/platform-economy.html.

Other changes in effect for the 2024 tax year will be welcome news to affected taxpayers. Those who are saving for the purchase of a first home through the Home Buyer’s Plan (HBP) will benefit in two ways. The HBP allows first-time homebuyers to withdraw funds (to a specified maximum) from their registered retirement savings plan (RRSP) on a tax-free basis, where those funds are used to make a down payment on a first home. All such funds withdrawn must then be repaid to the RRSP over a 15-year period, with the repayment period beginning two years after the withdrawal is made.

The budget provisions made two changes to the existing rules. First, the HBP withdrawal limit was increased from $35,000 to $60,000 for withdrawals made after April 16, 2024. In addition, temporary repayment relief will be provided, as the start of the required repayment period is deferred by an additional three years for participants making a first withdrawal between January 1, 2022 and December 31, 2025. Accordingly, the 15-year repayment period will start in the fifth year following the year that the first withdrawal was made.

Individuals who make contributions to the Canada Pension Plan or the Québec Pension Plan and who had income of more than $68,500 in 2024 will notice a change in their required contribution amounts for that year. Such individuals will be required to make “second tier” CPP/QPP contributions on that additional income, to a specified maximum contribution amount. Employees who are subject to the second tier contribution requirement will have had such additional contributions (to a maximum of $188) deducted from their wages or salary throughout the year. However, self-employed individuals, who pay their CPP/QPP contributions for the year when filing the annual tax return, and who pay both the employer and employee contributions, will notice an increase of up to $366 in such contribution amounts which must be paid for 2024.

Finally, Canadians who donate their time as volunteer firefighters or volunteer search and rescue personnel will see the amount of tax credit they can claim to offset expenses related to those activities doubled. Specifically, the Volunteers Firefighters Amount and the Search and Rescue Volunteers Amount have been increased from $3,000 to $6,000 for eligible individuals who performed at least 200 hours of combined eligible volunteer service during the year.

To alert Canadians to the changes which may affect their tax return preparation for the year, the Canada Revenue Agency provides a listing and explanation of such changes. That information is included in the Income Tax Guide for 2024 returns and can also be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html.

Each spring, Canadian individual taxpayers must turn their attention to the filing of an individual income tax return for the tax year which ended on the previous December 31. And, while it’s doubtful that many of them do so with any degree of enthusiasm, the rate of compliance with the requirement to file a tax return in Canada is in fact very high. Last year, more than 33 million individual income tax returns (for the 2023 tax year) were filed with the Canada Revenue Agency.

Each spring, Canadian individual taxpayers must turn their attention to the filing of an individual income tax return for the tax year which ended on the previous December 31. And, while it’s doubtful that many of them do so with any degree of enthusiasm, the rate of compliance with the requirement to file a tax return in Canada is in fact very high. Last year, more than 33 million individual income tax returns (for the 2023 tax year) were filed with the Canada Revenue Agency.

When it comes to filing their return for the 2024 tax year taxpayers have, generally, three choices in how to prepare and file their return. The vast majority will choose to prepare that return (or have it prepared for them) using tax preparation software and then file it using one of the CRA’s online filing methods. In 2024, more than 92% of the 33 million returns filed were prepared and submitted in this way.

Taxpayers who choose to file online have two options available to them. The first of those – NETFILE (used last year by just under 33% of tax filers) – involves preparing one’s return using software approved by the CRA and filing that return on the Agency’s website, using the Agency’s NETFILE service. The second method – E-FILE – involves having a third party file one’s return online. Almost always, the E-FILE service provider also prepares the return which they are filing. And it seems that most Canadians want to have little to do with the preparation of their own returns, as last year around 60% of all the individual income tax returns filed came in by E-FILE. 

The majority of Canadians who would rather have someone else deal with the intricacies of the Canadian tax system on their behalf can find information about E-FILE on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/efile-individuals.html. That site will also provide a current listing (searchable by postal code) of authorized E-FILE service providers across Canada; that listing can be found at https://apps.cra-arc.gc.ca/ebci/efes/epcs/prot/ntr.action.

Those who are able and willing to prepare their own tax returns and file online can use the CRA’s NETFILE service (which was available as of Monday February 24, 2025); information on that service can be found at http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html. While there are some kinds of returns which cannot be filed using NETFILE (for instance, a return for a non-resident of Canada, or for someone who went bankrupt in 2023 or 2024), the vast majority of Canadians who wish to do so will be able to NETFILE their return.

At one time, it was necessary to obtain and provide an access code in order to NETFILE. While such a code is no longer a requirement, the Canada Revenue Agency has provided tax filers with a taxpayer-specific code which can be included with the return for 2024. That eight-character alpha-numeric code is found (in very small type) in the top right hand corner of the first page of the 2023 Notice of Assessment, just under the “Date Issued” line for that Notice of Assessment. Including the code with your return is not mandatory; however, the taxpayer will be able to use information from the 2024 return when confirming their identity with the CRA only if the code was provided on the return for 2024.

A return can be filed using NETFILE only where it is prepared using tax return preparation software which has been approved by the CRA. While such software can be found for sale just about everywhere at this time of year, approved software which can be used free of charge, or for a nominal charge, is also available. A listing of free and commercial software products which are approved for use in preparing individual returns for 2024 is maintained on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html. That listing will continue to be updated by the CRA throughout the tax filing season.

The second filing option is to file a paper return with the CRA. And, while’s that’s not the choice of the majority of Canadian taxpayers anymore, last year about 2.5 million taxpayers did choose that option.

In order to file a paper return, of course, it’s necessary to obtain hard copies of both the return and the guide to completing that return. And doing so is harder than it used to be. At one time, a tax package (form and guide) could be picked up at a CRA office or Canada Post location. Until last year, the Agency would automatically mail a hard copy of the return (but not the guide) to any taxpayer who had paper-filed their return for the previous year. This year, however, the CRA website indicates only that “The CRA will mail the income tax package to certain vulnerable individuals that filed their 2023 income tax and benefit return on paper.” No additional information is provided on which individuals will automatically receive a tax package by mail.

That being the case, those who wish to receive a hard copy of the 2024 tax return have a few options. The first such option is to go onto the CRA website at  https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html, select the return for your province or territory of residence as of the end of 2024, and then download and print that document.

For those who do not wish to or cannot download or print, a hard copy of the return package can ordered online at Order the 2024 income tax package. That package will then be sent to the taxpayer by regular mail.

Finally, it’s still possible to order a hard copy of the return package by calling the CRA’s automated forms and publications line at 1-855-330-3305. That line is available from 6 a.m. to 3 a.m. Eastern Time, seven days a week.

There is a third option for some taxpayers – filing their return using a touch-tone telephone – but that option is available only to those who have received a specific invitation to do so from the CRA. Generally, invitations to file by telephone (called SimpleFile) are extended only to taxpayers whose returns are relatively simple and whose tax situation remains relatively unchanged from year to year. For such taxpayers, it is important to file, even if there is no income to report, so that they receive the benefits and credits to which they are entitled. Information on SimpleFile by Phone can be found on the CRA website at Ways to do your taxes - Personal income tax - Canada.ca.

Finally, taxpayers who are not comfortable preparing their own returns, but for whom the cost of engaging a third party to do so is a financial hardship, have another option. During tax filing season, there are a number of community tax clinics staffed by volunteers at which taxpayers can have their returns prepared free of charge. A searchable listing of the available clinics (which is updated regularly throughout the filing season) and their method of operation (walk-in, appointment, virtual, etc.) this tax season can be found on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/free-tax-help.html.

While there are a number of filing options available to Canadian taxpayers, there’s no element of choice when it comes to the filing and payment deadlines for tax returns for 2024. The deadline for payment of any balance of taxes owed for 2024 is Wednesday April 30, 2025. There are no exceptions to this deadline and, absent very unusual circumstances, no extensions are possible

For the majority of Canadians, the tax return for 2024 must also be filed on or before Wednesday April 30, 2025. Self-employed taxpayers and their spouses, however, have until Monday June 16, 2025 to file their returns for 2024. (While the filing deadline for self-employed taxpayers and their spouses is normally June 15, this year that date falls on a Sunday and so the filing deadline for self-employed taxpayers and their spouses is extended to Monday June 16, 2025.) It’s important to note that, regardless of the applicable tax return filing deadline, all Canadian individual taxpayers must pay any balance of tax owed for the 2024 tax year on or before Wednesday April 30 ,2025.

A summary of filing and payment due dates for returns for the 2024 tax year can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/important-dates-individuals.html.