Government benefits and credits you'll get late if you don't file your taxes on time
Regularly employed Canadians have one day left to file their taxes in Canada by the April 30 deadline.
According to a survey from H&R Block, 22 per cent of Canadians have yet to file their tax return.
More than half (58 per cent) of those yet to file say they plan to file before the deadline, but haven’t gotten around to it yet, and 12 per cent say it’s because they have yet to receive some documents they need.
If you’ve been slacking, now’s the time to catch up so that you don’t miss out on any immediate benefit and credit payments, or incur any penalties.
Daily Hive spoke with H&R Block tax expert Yannick Lemay about what could happen if you file your taxes late in Canada.
Late benefit and credit payments
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Lemay says there are a lot of credits in the last few years, both from the federal and provincial governments, that are being paid outside of the tax return.
“That means in order to receive them, you need to have filed your tax return,” he explained.
“The government use information on your tax return to calculate your eligibility for some of those credits.”
He says the big federal credits that require you to file your taxes in Canada on time to receive a timely payment include:
- GST/HST credit
- Canada Child Benefit (CCB)
- Canada Carbon Rebate (CCR)
So, if you’re a parent who relies on the monthly CCB, you’ll need to file your taxes by April 30 so you can receive it on the May 20 payment date.
The final carbon tax rebate was paid out on Tuesday, April 22. If you didn’t see it in your bank account right away, that may be because you didn’t file your 2024 tax return electronically by April 2.
You can still receive the CCR, but only after the 2024 tax return is assessed. Lemay says this goes for the other credits listed above.
There are also government benefits that Canadians can only apply for after they’ve filed their tax return. An example of this is the Canada Dental Care Plan, which is expanding its eligibility next month.
“In order to qualify, you need to have a family net income of less than $90,000, so the government wants to verify that information with your tax return,” explained Lemay.
Another benefit you’ll need to have filed your taxes for is the Guaranteed Income Supplement, which is a monthly payment you can get if you’re 65 or older.
“This is a significant amount of money for seniors with low income, and the Guaranteed Income Supplement is a tax-free supplement, and so it could make a difference for people 65 and up,” said Lemay.
Penalties for filing your taxes late in Canada
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The H&R Block tax expert strongly advises Canadians to file their returns on time to avoid incurring penalties.
Lemay says the delayed filing penalty is five per cent of the amount of taxes you owe to the Canada Revenue Agency (CRA). That’s if you file your taxes in Canada late by one day.
On top of that, you’ll incur a one per cent penalty on the taxes you owe for each month missed after the tax deadline.
Lemay stresses that Canadians can still get penalized even if they don’t owe taxes. He gave the example of someone having a tax election on their return, which is when a taxpayer elects how they want the CRA to tax their income.
“If you file your return late, even if you don’t owe taxes, that tax election will be filed late with CRA and this is when you can have a penalty,” he explained. “You don’t have to be in a complex situation in order to have tax elections available for you.”
The five per cent and one per cent penalty per month is based on the taxes you owe. If you have a tax election that’s filed late, you’ll incur a separate penalty. If you own property outside of Canada and file the necessary form late, that’s another separate penalty. Ultimately, penalties can stack depending on your situation.
The CRA also takes into account whether it’s your first time filing late or if you’ve been consistently late over the last few years.
Canadians who have filed late in the past three years and have received a demand letter from the agency will see their interest double to 10 per cent upfront and two per cent each month for 12 months.
This is why Lemay suggests people file their taxes in Canada sooner rather than later.
Canadians who are self-employed have until June 16 to file their return. However, if they owe taxes, they’ll still need to pay them by April 30.