Do not file your personal tax returns late!

Do not file your personal tax returns late!
2021 / 04 / 23

For the 2020 tax year being filed now, the tax return filing deadline is April 30, 2021.  Unlike last season, CRA does not appear to be willing to extend the filing deadline.  If you or your co-habiting spouse or common-law partner are self employed, both of you have until June 15, 2021 to file personal tax returns.  Regardless of filing deadline, interest on balances owed will be applied for balances not paid in full by April 30, 2021.

For the 2020 tax year, Canada Revenue Agency is offering interest relief to individuals who had a taxable income of $75,000 or less in 2020 AND have received income support in 2020 from one of the following COVID-19 benefits:

  • Canada Emergency Response Benefit (CERB)
  • Canada Emergency Student Benefit (CESB)
  • Canada Recovery Benefit (CRB)
  • Canada Recovery Sickness Benefit (CRSB)
  • Employment Insurance benefits; or
  • Similar provincial emergency benefits

If you have a balance owing from your 2020 tax return, earned $75,000 or less in taxable income for 2020 and received income from one of the benefits noted above, you will have until April 30, 2022 to pay your balance owing and avoid paying interest.  If you earned more than $75,000 in taxable income for 2020, you will not be eligible for interest relief.  CRA will automatically apply interest relief for individuals who meet the criteria.

Regardless of whether you may qualify for interest relief, it is important to file before the tax filing deadline for the following reasons:

  • Avoid interruptions in the receipt of GST, Child Tax or Guaranteed Income Supplement
  • Access to CRB/CRSB, if applicable.  CRA has stated returns filed late will lead to a delay in processing future CRB/CRSB payments.
  • Avoid Late Filing Penalties if you owe money to CRA

CRA will charge a late filing penalty if you owe money and do not file your tax return on or before the deadline.  If you file your 2020 tax return late and owe money, you will be charged a late filing penalty equal to 5% of the balance owed, simply for filing late.  CRA will charge an additional penalty equal to 1% of the balance owed for every additional month the return is not filed, up to a maximum of 12 months.

If you were assessed a late filing penalty by CRA for the 2017, 2018 or 2019 tax years, the agency can a assess a late filing penalty equal to 10% of the balance owed for a late filed 2020 tax return.  CRA will charge an additional penalty equal to 2% of the balance owed for every additional month the return is not filed, up to a maximum of 20 months!

If you do not have the money to pay a balance owed to CRA before April 30, 2021, its best to file the return on-time to avoid having penalties assessed.  Once CRA assesses a penalty, it is very difficult to convince them to waive it after the fact.

If you end up owing a balance to CRA and cannot pay it, please do not hesitate to contact our office for a free consultation to explore your options.

We are pleased to offer Debt Consulting, Debt Relief, Consumer Proposal and Bankruptcy services to the following areas: Saint John, St. Stephen, St. Andrews, St. George, Grand Bay-Westfield, Fredericton, Oromocto, Rothesay, Quispamsis, Hampton, Norton, Sussex, Petitcodiac, Moncton, Riverview, Miramichi and all places in between.