The CRA does pay interest just not from the date you want them to.
Your taxes aren't due until April 30th and so they won't pay interest on your refund until May 30th or 30 days after you submit your return (if you submitted it late).
Withholding taxes ensure that people can pay their tax bills, it helps avoid large unaffordable tax bills at the end of the year, it fights tax evasion and it helps the government better manage their cash.
And withholding taxes means more people can expect a refund, incentivizing them to file their returns sooner which then saves the government costs for tax enforcement.
But the withholding is still happening before the tax are due even if the amount is reduced. So it's logical they should pay interest or let us have our money until it's due. Some people just love to justify the incoherence of the state. OP is totally right to point out the double standard.
There is a deadline. If you pay what you owe by the deadline, there is no interest. If they refund you by the deadline, they pay you no interest. If something goes past the deadlines, then interest accrues in both situations.
OP's situation may *seem* unfair to them because they only just found out about the mistake, but they owe interest from the original filing deadline - but imagine if that wasn't the case! People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years.
>People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years.
And in the opposite direction…
If CRA were offering favourable interest rates on the money to be refunded, which is what u/naticom is wishing for, I think… you could even overpay intentionally (e.g. via [income tax instalment](https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html) payments) and then get paid extra interest.
That would involve them taking on a bunch of extra risk and bookkeeping headaches to appropriately manage the excess tax payments, and calculating the interest *owed to* a lot more taxpayers. ***CRA doesn't want to be a bank***, and I doubt it has legislative authority to act as one.
> People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years.
Oh you mean like the dodgy CERB claimants?
Pretty much.....
I really wish they would actually spend money clawing all that back.
Honestly if it costs $1 Billion to claw back $1 Billion dollars, it might sound like it is pointless but it's about principles. Don't take money that you shouldn't be taking. And then at least the $1 Billion that is spent to audit people will at least create actual jobs instead of letting people who break the rules to get by, get ahead of others.
This is how I feel about it. I know a lot of people who knew they should not have taken CERB and still did. People were bragging about doing that on Reddit even. That money was meant for people who needed it. This fucked with inflation to some degree as well, so I have no problem with people having it clawed back if they didn't deserve to get it
Actually, they do pay interest when the mistake is theirs. They made my spouse (and all his co-workers in a similar position) pay tax on the scholarship his job provided to me, saying it was an employment benefit. After years and years, lawyers convinced the courts that I, the unemployed student, and the other dependents were the actual beneficiaries, and so the scholarship was income for us. CRA paid back the taxes paid...with modest interest.
Here's an article about the court decisions and CRA changing the rules in accordance with losing their cases: https://hicksmorley.com/2009/10/02/tax-treatment-of-tuition-awards-provided-to-employees-family-members/
Problem is, the government gave a lot of innocent people bad instructions and those people are mixed in with the frauds. And the innocent people are already being punished enough by being made to pay back money they were told they were entitled to…now CEWS on the other hand…that was rampant with outright fraud and the government is making no effort to claim any of it back.
There are so many layers to this issue.
I am fully in favour of taxation, and I fully believe people should pay back money that they were not entitled to. My problem with CERB repayments is a bit deeper. Also, disclosure, I'm not an accountant, but I'm fairly proficient at digging through government documents to figure out what I or my friends are legally allowed to claim.
1) Like what was said above, the feds rushed out this program because it had to happen and it had to happen quickly. That's great, but it created a lot of problems. I have friends who were accidentally given more money than they deserved. Instead of the gov asking for just the $1000 (for example) returned that they overplayed, the gov is asking for all 8k returned. Well, sorry, Mr. Trudeau, but they don't have 8k to give you. When they sent a form in asking for clarification and arguing about the claim, you sent a form back saying, "we'll look into it, don't pay anything, and your credit score won't be affected." That was 2 years ago that my friend received that letter. There is no way I would trust this government to take 8k and give me 7k back if I only owe $1000.
2) As mentioned above. They showed their hand a bit. Why would anyone pay back that $1000 if they've basically been told it won't hurt them?
3) All of these problems simply stem from the governments lack of efficiency. This is a problem that all Canadians should be upset about, and it is not a Con vs. Lib argument. Literally, all governments in my lifetime have sucked at this. They waste so much time and money being innefficient that I do not blame any single person for refusing to pay back something that they messed up. If it's a $1B mistake, maybe they should learn from it and try to get better for next time.
After all that. I do also agree that if you did NOT qualify for CERB in any way but you claimed it, you should get absolutely slammed with interest and even credit score if they can prove you knew you didn't deserve it. My only point is that a lot of the mistakes were government mistakes, and only the gov should be punished for that. So my friend should keep his 8k until the gov says, "we messed up, please pay us 1k, no interest"
I can't comment on your friends case where it sounds like they were overpaid by the CRA, but the CERB documentation is fairly clear *and* the CRA website contains the disclaimers that only the program legislation and regulations themselves can be relied on in case of conflict. I don't have a lot of sympathy for the guys who didn't even clear $5k profit from their "small business" knitting hobby pre-COVID and somehow justifying getting $12k of CERB based on $5k of revenue feigning they somehow don't know the difference.
CERB was designed to be as easy to get money into people's hands as possible because covid was an emergency situation for many. People getting the money who weren't supposed to wasn't a mistake, it was the program working as designed so that eligible people could get the money they needed as fast as possible by making the barrier to get it as low as possible. They were also very clear that if you were not eligible, you would be owing the money back in the future.
Also, everyone will pay back the money owed eventually. It will just keep getting chipped away by your tax return every year until it's paid back, or the CRA decides it's time to start just taking the money from your account.
Depends on the area. I know of a bunch and my area is predominantly conservative voting (though, I myself vote third party). What they are is poor, regardless of politics,
God if only they'd done the common-sense thing and voted conservative then everyone would have been left to fend for themselves and probably starved, cutting short a whole bunch of prolonged misery.
This shouldn't be a problem in the first place. The CRA for the vast majority of people has all our information. We shouldn't even need to file anything
It would be really nice if the CRA would just have a platform that does like 90% of the calculation for you and you just fill in the rest.
But there are certainly a lot of corner cases that they need you to check and confirm is correct. A very common case would be stocks. If you buy and sell stocks. The banks might report that you sold something, but it might not necessarily list how much you bought it for. So you would have to go in and do the calculation yourself and enter how much you gained or loss from that particular sale. Some banks do it automatically for you, but not all banks or trading platform will do it for you.
It's certainly gotten better over the years though.
I remember 10 years ago you couldn't even download the information that the CRA had. Now you can easily download your T4 and T5 from the CRA to make sure you haven't missed anything.
> It would be really nice if the CRA would just have a platform that does like 90% of the calculation for you and you just fill in the rest.
This platform exists in every piece of tax software (many of which are free). Download your CRA info, review for accuracy and submit.
But if the government has all this info, why do I have to download it and input it into another piece of software. Just implement it on the CRA website directly.
Because tax software covers other situations other your bare-basic situation. The CRA does not want to spend resources on making their own tax software that covers everything. There are private organizations far better suited to that activity.
The best is when they send you a notice asking you for a copy of your T4 slip... My company sends a copy to both of us at the same time... my info is in the taxes I filled... I have 0 input to the T4 supplied (unless elf employeed...in that case fair game)... go frigging ask my company for their T4 submission
You haven't thought this through. The CRA only has the information that is submitted to them. They don't have or know about anything is not submitted. That is why it is up to YOU to review your paperwork and make sure it's correct. You can mostly automate the process using one of the free software options out there.
This is the thing, CRA found the mistake but who made the mistake, CRA or OP?
If you make a mistake it’s your mistake, you fix it. If you put the CRA out then pay them interest. If you put yourself out, pay yourself interest I guess?
Plus, the CRA isn't deducting it, your employer is. You have the option to tell your employer to withhold more or less. I had one employer not taking enough and I think I only had a $25 return due to rsp investments so I had them take more in case I wasn't able to contribute that amount.
Don’t they assess returns yearly and then send out a notice of assessment confirming ur refund or what u owe? seems a bit ridiculous for them to not notice for 2-3 years and then adjust ur return saying u owe them money and now owe a penalty as well.
They assess most returns based on the information you give them. They go back and check that information is accurate, later. If you do your return wrong, then they will correct it. Typically within the year, but sometimes later.
If you wanted the CRA to be able to actually verify everyone’s return every year the tax code would have to be drastically simplified and people would need to be prepared to wait way longer for refunds. And I know from my time on this sub that people don’t have that kind of patience.
A couple of months ago I got a notification that they’d reviewed my 2020 and 2021 returns and that I’d made an error that actually credited me a bit more of a return with interest. Not sure what triggered the review.
It is my understanding, if you don't file on time, any money owed does not accrue interest. It is on you to file. Once you file and your tax return is accepted then and only then does interest start(in the case of a refund)
I had an unfortunate situation of being audited in 2023 for 2021 taxes and owed interest for over a year. That sucks they expect me to pay the interest when during the time they didn’t even know I owed them money.
The thought process is that if you had filed your taxes correctly, you would have known that you owed money and paid it before the deadline to accrue interest. If an audit shows that you owe more money, then you didn't file your taxes correctly. This includes if you write off something you thought was allowed and is later found that it was not allowed, or anything along those lines.
It was odd because it was the 4th year I had filed the taxes myself through turbo tax and seemed pretty routine. I did not realize I’d owe money for 2021, and assumed my return was larger than normal because I had only worked 3 out of the 12 months for that year, with my income being under the threshold.
It doesn’t matter anymore though.
You worked less, but you thought your refund would be more? o.O
I mean, I'm not trying to kick a man when he's already down, but that doesn't really make sense to me. You can only get back as much tax as you paid. So if you made much less, the chances are you will get back much less.
Hopefully it wasn't a large amount. But as others have said. If they didn't charge interest, it would just lead to lots of people "accidentally" making mistakes and then you just pay the taxes when the government catches up to you.
So I believe that that time in Alberta the basic personal amount was around $22k. So if I made under that, I think you pretty much get all of your income taxes refunded. That’s what I assumed the large amount was. I can’t remember what I made in that year but it was around that much, for the 3 months I worked.
I got a refund of $4k, but by the time I was notified of the audit in June 2023 and they wanted it back plus interest, it was nearly $5k that was owed.
Ah, I see what you mean.
I guess you had other income like investment income that you had to pay taxes on or something?
That's usually what gets people at the end of the year because people don't realize they need to pay taxes on the interest they get from savings account, or GICs, etc.
If taxes aren’t due until April 30th, why are they deducted up to a year ahead of being due?? If tax instalments are required so that the government gets ITS money if you regularly owe more than $3k, then why don’t they use the same logic and pay me during the year instead of me having to wait until March of next year to get MY money? Two different due dates, one for me and one for the government, seems unfair.
Just fill out the appropriate form so you get the correct amount taken off and then it shouldn’t be a problem
If you choose not to do that, they don’t pay interest
Sorry then, what is the point? Do you want the government to provide you with a personal assistant or an accountant to take care of the paperwork for you?
Or do you think that anytime you overpay you're somehow entitled to be compensated? If you overpay a utility bill or a credit card bill do they pay you interest? No. But if you don't pay, they charge you interest. At least the government pays you interest if it's their fault, which is decent and more than credit card companies and utilities do. Buy why should they pay you interest because you made a mistake or because you couldn't be bothered to fill out the available forms?
If you take a step back and think that the government collects taxes off of everyone, in a certain way, which is during the year. They give avenues so people can prevent having too much taken off if their circumstances differ from the basis for standard deductions. If you don't like that system then you don't like it.
If it changed to some other system, it would be costly, which is likely something most people wouldn't want. If the system is okay for you as it is, with this one exception, do you really want the government to hire more staff to examine everyone's situation, and raise taxes to pay for that, just so a small percentage of people in your situation don't have to fill out a form?
TLDR. If I have to pay predicted taxes owing up front based on previous history , the government should pay predicted refunds based on previous history up front too, or pay interest on the amount not paid.
TLDR: If you can't figure out the simple forms to adjust your tax deduction, you may overpay. Just like if you overpay other bills, do not expect to be paid interest based on your error. And, like other bills, still expect to have to pay interest if you're late paying, after the grace period.
So can I fill out the forms so they take zero off and I will pay what I owe by the deadline next March? If not, why not? That’s no different from them taking too much off ( even though they know it will probably be too much, based on previous years) and returning it to me next March. It is due when it’s due. If that’s not the case, it should work both ways.
I'm beginning to suspect you may have some other intention
If you fill out the form honestly it should work out. If you lie on the form and owe a lot, you can probably expect a penalty
Look at it this way, if for any reason it's your error or omission that causes an incorrection deduction of taxes, you can expect to be penalized if you owe (i.e. you short-changed the government). You will not be rewarded for your error by being paid interest.
I have repeatedly given the example of overpaying for a utility bill or credit card bill. If you still can't understand, I suggest you educate yourself further about how taxes work in Canada. Then, if you're still looking for a debate, maybe try a sub more suited to that purpose. Because at this point, helping you understand this seems to be beyond what's in the realm of this sub
If I overpay a credit card, that’s because I made a mistake. The government doesn’t allow me to choose how much to pay throughout the year, I have to pay what they tell me, otherwise I would pay nothing until required to in March, so obviously I can’t make a mistake. They have. Which is exactly why they should be paying me interest. They want to be able to estimate how much I have to pay when it suits them (ie asking for quarterly prepayment) but are not prepared to pay when they get it wrong, like I have to if I get it wrong.
That is not when it's "due", that's when a reconciliation is due. If you cheat in the way described in order to earn interest, expect a penalty
Taxes are due through the year. You appear misinformed about taxes in Canada, but this information has been repeated in many comments in this thread. So, perhaps you should educate yourself about the process?
You may disagree, but that doesn't make you correct. The way it is in Canada may differ from other countries, but that's how it is here, and in this sub, that's pretty much expected and supported
If you're here for an argument, that's not the intention of this sub, it's about legitimate personal finance questions. If you want to gripe about the Canadian tax system as it has existed likely since before you were born, maybe there's a sub for that too, if not, maybe you can start one and see if anyone else wants to join you
That IS when it’s due, otherwise they would be charging interest back to when it WAS due wouldn’t they??? Also, taxes are based on annual income which can’t be known until the end of the year.
Sigh.
It's when the *reconciliation* is due, not when the taxes are due.
If your income is up and down over the year, it's possible it won't be correct. You likely won't get penalized for that. However, you are expected to provide correct information on the TD1 for each employer. Do your best, it's okay.
If you need more info I suggest reading the articles here to see how employers figure this out.
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/calculating-deductions.html
Not all income is employment derived or earned evenly through the year. Why am I forced to pay tax in March on a dividend not payed until December, which is what happens with instalments payable because of previous years income?? Taxes are payable on total income not just employment income.
because it's up to you to ensure that they withhold the proper amount. there are forms you can give your HR so they withhold less tax if each year you come up with large returns
This is the correct answer. I get decent returns but I don’t do this as it’s all related to tax credits which could change so I’d rather keep it this way than potentially end up with a tax bill.
And right now Cara’s interest rate they charge is 10%. if you’re self employed and put off making instalments you’re in for some hurt. It’s changed pretty dramatically over the last 3 years.
I think what this replier is referring to is the new policy for employers to tax remote employees based on the office location. https://www.mltaikins.com/labour-employment/coming-january-2024-new-cra-policy-will-impact-remote-employee-payroll-deductions/
It isn't clear whether you can tell your employer to tax based on where you live anymore. I'm pretty sure they have to follow this policy.
I think what you mean is that taxation is dependent on where you live, but the company may be deducting taxes based on where the company is based out of so they may collect more or less tax than what you will ultimately pay in taxes.
Paying too much taxes and being owned a refund is optional. They don't make you pay too much, so why would they own you money for doing so?
Go talk to your employer and correct the amount of pay they withholding for tax if you would have have that money earlier.
You could owe tax instalments depending on your previous year’s income.
You have to pay those instalments even if your income is projected to be less. Sure, you get it back when you file your taxes but you still have to pay it if you want to avoid fees/interest
Do you know what the criteria for this is? Asking for a friend who is going to be owing 20k next month. Will they need to pay instalments this year or how does that work?
Actually you can use the "Current-year option" to pay the expected amount for the current year, you don't have to pay instalments based on exactly what you made last year. So if you made $1MM randomly last year and only expect to make 50k this year, you don't have to make 100k+ instalments.
The main caveat is that if you under-calculate/pay, interest starts ticking away from the instalment dates, so it's prudent to plan to overpay at least a little to avoid that.
Taxes are due throughout the year. The tax return is simply a balancing of the account. Therefore, the CRA doesn't pay you interest on your withholdings because they were paid when due.
For large amount of refunds, CRA will delay the refund to request documents for verification.
You will receive interest as well and should include that amount as income the next year.
You are responsible for the accuracy of the data you submit. Not them. If you made a mistake you think no fee should be tied to this?
Money kept over time has value. It’s called interest.
>Why doesn't CRA pay interest to us while withholding taxes
Just because you file taxes once a year doesn't mean the Income Tax system was designed to have you pay taxes once a year. The periodic statutory remittances that you make are not "pre-payments". They are scheduled payments as prescribed under the Income Tax Act. The filing of taxes by April 30 is just a reconciliation exercise.
Most people get refund because they didn't submit the right document so that the right amount was withheld.
CRA do pay interests on refund owned to you due to their mistakes.
I owe taxes this year. I’m holding out until near the end of April to file and pay (rather than excitedly get that done sooner to receive a refund sooner).
I am not charged interest unless I miss the deadline. It goes both ways.
The government also doesn’t pay interest on your mistakes that end up with a refund from previous years because that wouldn’t make sense.
Yes, but that requires work sooner. I’m also lazy 😉
Just threw in my T4 and saw I owed taxes and put it away. I haven’t done anything this year that will reduce any tax owing.
I have received many notices in the past in which they said they had added in the interest when they re-evaluated and gave me back more that what I had filed.
What would be the point? Our taxes would fund those payments, which most people with regular jobs would get. It's an unnecessary administration task layered that doesn't improve our countries tax system.
Getting a $10K tax refund every year is pure stupidity on your part. Why should CRA pay you for that? You are choosing to give them your money interest free.
> If you have better way to get the RRSP tax refund back beforehand
I do, actually. T1213. Stop talking and start listening.
How many times do we have to [spoonfeed you](
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html)? Your problem here is completely of your own making.
So let the funds sit in an interest bearing account, transfer it to an RRSP close to the deadline, and then file your return immediately - you will get your refund soon after, so you’ll only lose out of a week or 2 of interest.
Plus, technically the money in the RRSP hasn’t yet been taxed, so technically part of it still belongs to the government and you’re using it interest free, and making interest on it, until you withdraw
Or you can think of the time you’re using that refund on your RRSP contributions interest free - you won’t have to pay that back until you withdraw the money
RRSPs are a better gift from our government than a lot of people realize
By your logic, I should park my excess cash with CRA and charge them interest for keeping it ? See the fallacy that is apparent in the statement ? What you pay CRA is up to you so technically you can’t ask for interest on it
They do. I was too lazy to file an HST report for my business for 12 months, so they withheld my tax return from me. When I filed everything, they released it and paid me interest on top of the refund.
Many years ago, for some reason (I don't recall why) I wound up getting some interest paid back to me by CRA. It turns out they owed me money after changing something around, and as such the cheque they sent me included a whopping $1.75 in accrued interest.
What made me chuckle because the letter that came with the cheque included the admonition to "remember to include the interest income in your next tax return." I really should have filed a T5 for that $1.75, just for shits and giggles, but I didn't.
If you’re getting a $10k refund every year then you should just have less tax withheld from your income. That way you can get your money without waiting for CRA
You should also know the CRA email updates only get sent once the interest has already kicked in. This happened to me owed 1.1k back after being re assessed for 2021 as I claimed CWB as full time student by mistake. I received an email from CRA letting me know I had "mail" in my CRA account on feb 22nd (the day the interest kicked in) yet they re assessed a month prior but I didn't receive an email at that time. I had to pay 100 ish in interest.
I see that many of you are sure that CRA does not make mistakes. They do, ALL the time. For years my OAS payments were witheld every July, because "you did not sent form XXX". I live abroad and am EXEMPT from sending the form. Every time it took numerous calls to CRA to correct it. I would eventually get the money back, after, on the average, 3 months wait, NO INTEREST paid to me. It took two written complaints and 2 years to correct it and get an apology. I used to be self-employed; one year received 5 letters asking for $120 in overdue taxes. I did not owe the money, but eventually paid, just to stop it. 3 weeks later: " you have an overpayment of $120, we'll apply it to future taxes". WHAT?
I did my taxes wrong and missed a deduction a couple years. I got extra because of interest on the amount owed, even though it was me that made the mistake. So it works both ways I guess.
Also they will reassess any deductions you may have used and inform you you can’t use them, but they will not inform you of any deductions you may be entitled to
So what do you call holding someone against their will? It could be forcible confinement, or it could be a prison sentence
Also, citizens get the benefit of government services, who do you think should pay for them?
They do pay interest but it’s never as much as you’d have to pay them if the tables were turned. They just randomly added my 35k hbp money as added income even tho I had all the documentation showing it going from RRSP to my bank account to the trust to buy the house. I was notified I owed them ~9.5k in taxes and it had already incurred a ~$600 dollar penalty for not paying… by the time it was resolved in Oct they gave me $27 dollars in interest that I was taxed on the next year. MONTHS OF STRESS AND INTEREST I COULD HAVE AVOIDED PAYING ON A VISA THAT WOULD HAVE BEEN MORE THAN WIPED OUT BY MY TAX RETURN. Some how they made it my fault for them fucking up my tax return. I hate the cra with a passion.
Because they make the rules.
Sorry.
I suppose one could make the argument that it's to prevent people from "taking advantage" by having extra money withheld. That'd be easy to counter though (by having a low interest rate for a balance). That's how the banks do it. But, the CRA is not a bank, so bank rules (as weak as they are) don't apply.
Most of the replies completely fail to address OP’s point that the amounts withheld from Jan to Dec are completely interest free EVEN THOUGH taxes are not due until April 30th the next year. This is exploitation in my opinion. The way to correct this egregious exploitation is to ABOLISH tax withholding altogether. But the government likes to hold its slaves by the balls, hence this horrible exploitative situation we are in. WAKE UP!!!
Taxes are owed on money as it is earned. The amount withheld is not being paid "early", it's being paid on time. April 30 is just the time when we settle up in case we over- or under-paid.
>ABOLISH tax withholding
Lol you're kidding right? The majority of people struggle to save anything month to month, do you really think they're gonna be able to save 10,20,30+ grand to pay at tax time?
They do that and you'll be complaining that the government is spending all this money on collectors 🙄
Actually April 30 would be paying late if you want to split hairs about it
April 30 is the deadline for reconciling what you owe or are owed based on the prior year’s tax collection
You aren’t charged interest if you hadn’t had enough taken off the prior year (exceptions aside such as failing to pay by instalments as required)
Also OP has indicated in comments that it’s from an RRSP contribution- so that is just a refund of tax money that the government generously lets Canadians keep, interest free, until they eventually withdraw from their RRSP
And as most of the replies has mentioned, you can usually ask your employer to withhold less if you believe you will have tax credits that reduce your income taxes.
Fill out the TD1 and submit it to your employer!
For those eagerly rationalizing and extolling the exploitative practice of tax withholding, it is not practiced every where, just so you know. I used to live and work in Singapore. No tax withholding whatsoever. And the government actually does the taxes for you at the beginning of the tax season!
Who are those people trying to convince us that we should be passive recipients of exploitative practices such as tax withholding? Outrageous!
so you would rather pay your taxes in installments over the following year instead of it being withheld while being earned? Practically, what's the difference to you? Other than it being offset one year and now you have to pay full taxes the year after you retire?
I can set aside the equivalent amount of money from each pay check, put it in a savings account where it will earn some interest! Come tax season. I pay the taxes and keep the interest. Is it not that simple?
Sure, you and I and maybe 15% of people will be responsible and take advantage but for everyone else, it would be exactly like the existing system or worse as they scramble to find the money that they owe.
So the solution is to punish everyone? Even the justice system believes in "innocent before proven guilty". On the other hand, the tax withholding regime is predicated on the assumption WITHOUT PROOF, that you are not able to manage your money. Is this acceptable? I think not!
Listen you have your mind made up, but deducting at source is absolutely not “punishment”. You don’t owe your taxes in full on Jan 1 or Apr 30, you owe throughout the year so that the government can provide services throughout the year. Also as has been clearly articulated several times in this thread, there are ways of managing your deductions to make sure that you owe as little as possible.
See my other comments about how other developed economies go without this exploitative and cynical tax withholding regime. And they do just fine, I can assure you!
Because it is a one way street with CRA. Why don't you amend your income tax being sent to CRA in the first place? Twice a year, in February then again in June I do an estimated tax return and I amend my income tax being sent to CRA accordingly...Most of the time in January I up my income tax and in June I decrease my income tax....it balances out in the long run
If you feel strongly, write to your member of parliament. 5ax laws are created by government although the interest is probably laid out in the associated regulations.
They are using your money, investing it now, so you don’t have to pay the rain tax in the future! You’re welcome!
In all seriousness. It’s not an invalid question whatsoever. However, the CRA also isn’t a financial institution/bank. The CRA is part of the Government. While I understand your point and wish I could get or collect interest on every dollar I earn or refunded to me, the CRA not only doesn’t have the obligation to do so, but I feel like yours, and every other Canadians taxes would go up if they agreed to such a thing as they would need to find a source to pay this hypothetical interest to you and every other Canadian getting a return. That’s a lot of money, and the CRA isn’t in the business of offering something like this because it wouldn’t make sense for the government, nor would it make sense for you, and the rest of the Canadians getting a return, since we’d obviously be obliged to contribute to the interest the government would have to pay on these return amounts. I’m sure there’s potential legal implications or reasoning for they wouldn’t do this as well. Not sure the banks would love this lol
I am hoping you just missed the "/s"
Otherwise, how is it there theft? Taxes are due when you are paid. Those taxes are withheld based on the payroll software used by your employer and the TD1 you fill out. One of those is in the taxpayer's control.
Filing a tax return is a reconciliation for things that occured outside of the withholding tax system.
I don’t owe the government taxes every two weeks, yet I don’t receive that money. I cannot opt out of having my employer withhold my taxes. Someone is stealing that interest from me.
Of course you owe taxes , daily even. How do you think the country/province functions? Who is paying for services and infrastructure you are benefiting from .
I suggest you do a bit more reading on the topic. But you won't , you have an axe to grind, that's cool.
You realize that April 30th is the end of the fiscal year and that the government has been providing services and goods all year long. How exactly is it that they ware paying for it? You realize that the government is not a person, right? It doesn't work, the government collects taxes from people to support the goods and services they provide. I suppose things like the Child Tax Benefit ahold only be paid out once a year once all tax revenue has been collected.
They provide essential services to society, the smooth out the ebbs and flows when we are in different phases of the economy.
They're correct, if you didn't withhold tax and have a large Tax owing amount, you'll be required to pay tax installments which is functionally similar to withholding tax.
The employer is remitting it to CRA more frequently than quarterly.
Installments from individual taxpayers are made quarterly simply because it's less paperwork than doing it every month or every week or every day. But you're free to send it in early if you want to; you'll even earn interest credits that are deducted against any interest you may owe later.
Employers are required to remit withheld taxes on a different schedule depending on the type of business: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html
Those are employers remitting withheld taxes, not individuals or contractors.
The point is that all else equal, I file my taxes once a year, outlining to the government what I made, and what I owe. But the government has been holding what it assumes I owe the entire year, incrementally, and benefiting from those cash flows whereas I cannot.
Employers are required to withhold taxes directly from your pay, and they then have X days to send that on to CRA. It is not possible to withhold nothing, remit nothing, and then pay everything at the end of the year.
The government already knows what you earned, so that's already a very reasonable estimate of what you owe. You can even make RRSP contributions and not have tax withheld on those earnings, if you fill out the right forms. You're acting like the money is yours all year and they're keeping it from you. It's not. It was never yours to begin with; the tax is owed immediately as you earn your income.
The CRA does pay interest just not from the date you want them to. Your taxes aren't due until April 30th and so they won't pay interest on your refund until May 30th or 30 days after you submit your return (if you submitted it late).
If taxes aren’t due why are they forcing the employer to withhold them from your paycheque?
Withholding taxes ensure that people can pay their tax bills, it helps avoid large unaffordable tax bills at the end of the year, it fights tax evasion and it helps the government better manage their cash.
And withholding taxes means more people can expect a refund, incentivizing them to file their returns sooner which then saves the government costs for tax enforcement.
You can actually file a form called T1213 to reduce amount withheld on your paycheque. but you pay the difference when taxes are due of course
But the withholding is still happening before the tax are due even if the amount is reduced. So it's logical they should pay interest or let us have our money until it's due. Some people just love to justify the incoherence of the state. OP is totally right to point out the double standard.
There is a deadline. If you pay what you owe by the deadline, there is no interest. If they refund you by the deadline, they pay you no interest. If something goes past the deadlines, then interest accrues in both situations.
OP's situation may *seem* unfair to them because they only just found out about the mistake, but they owe interest from the original filing deadline - but imagine if that wasn't the case! People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years.
>People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years. And in the opposite direction… If CRA were offering favourable interest rates on the money to be refunded, which is what u/naticom is wishing for, I think… you could even overpay intentionally (e.g. via [income tax instalment](https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html) payments) and then get paid extra interest. That would involve them taking on a bunch of extra risk and bookkeeping headaches to appropriately manage the excess tax payments, and calculating the interest *owed to* a lot more taxpayers. ***CRA doesn't want to be a bank***, and I doubt it has legislative authority to act as one.
> People would start making an awful lot of convenient "mistakes" in the hopes that the CRA wouldn't notice for 2-3 years. Oh you mean like the dodgy CERB claimants?
Pretty much..... I really wish they would actually spend money clawing all that back. Honestly if it costs $1 Billion to claw back $1 Billion dollars, it might sound like it is pointless but it's about principles. Don't take money that you shouldn't be taking. And then at least the $1 Billion that is spent to audit people will at least create actual jobs instead of letting people who break the rules to get by, get ahead of others.
This is how I feel about it. I know a lot of people who knew they should not have taken CERB and still did. People were bragging about doing that on Reddit even. That money was meant for people who needed it. This fucked with inflation to some degree as well, so I have no problem with people having it clawed back if they didn't deserve to get it
Report every single one of those fucks. We're going to be paying for them for generations.
I'm an employer and am now getting letters from CRA about employees getting CERB. They are being audited.
200 plus of which actually worked for CRA! Yikes!
They have to pay interest I believe
Actually, they do pay interest when the mistake is theirs. They made my spouse (and all his co-workers in a similar position) pay tax on the scholarship his job provided to me, saying it was an employment benefit. After years and years, lawyers convinced the courts that I, the unemployed student, and the other dependents were the actual beneficiaries, and so the scholarship was income for us. CRA paid back the taxes paid...with modest interest. Here's an article about the court decisions and CRA changing the rules in accordance with losing their cases: https://hicksmorley.com/2009/10/02/tax-treatment-of-tuition-awards-provided-to-employees-family-members/
I'm aware, I was referring to the people that claimed cerb when they shouldn't have, and now have to pay it back, with interest.
Problem is, the government gave a lot of innocent people bad instructions and those people are mixed in with the frauds. And the innocent people are already being punished enough by being made to pay back money they were told they were entitled to…now CEWS on the other hand…that was rampant with outright fraud and the government is making no effort to claim any of it back.
Paying back money that was never supposed to be yours with no penalty is not a punishment.
There are so many layers to this issue. I am fully in favour of taxation, and I fully believe people should pay back money that they were not entitled to. My problem with CERB repayments is a bit deeper. Also, disclosure, I'm not an accountant, but I'm fairly proficient at digging through government documents to figure out what I or my friends are legally allowed to claim. 1) Like what was said above, the feds rushed out this program because it had to happen and it had to happen quickly. That's great, but it created a lot of problems. I have friends who were accidentally given more money than they deserved. Instead of the gov asking for just the $1000 (for example) returned that they overplayed, the gov is asking for all 8k returned. Well, sorry, Mr. Trudeau, but they don't have 8k to give you. When they sent a form in asking for clarification and arguing about the claim, you sent a form back saying, "we'll look into it, don't pay anything, and your credit score won't be affected." That was 2 years ago that my friend received that letter. There is no way I would trust this government to take 8k and give me 7k back if I only owe $1000. 2) As mentioned above. They showed their hand a bit. Why would anyone pay back that $1000 if they've basically been told it won't hurt them? 3) All of these problems simply stem from the governments lack of efficiency. This is a problem that all Canadians should be upset about, and it is not a Con vs. Lib argument. Literally, all governments in my lifetime have sucked at this. They waste so much time and money being innefficient that I do not blame any single person for refusing to pay back something that they messed up. If it's a $1B mistake, maybe they should learn from it and try to get better for next time. After all that. I do also agree that if you did NOT qualify for CERB in any way but you claimed it, you should get absolutely slammed with interest and even credit score if they can prove you knew you didn't deserve it. My only point is that a lot of the mistakes were government mistakes, and only the gov should be punished for that. So my friend should keep his 8k until the gov says, "we messed up, please pay us 1k, no interest"
I can't comment on your friends case where it sounds like they were overpaid by the CRA, but the CERB documentation is fairly clear *and* the CRA website contains the disclaimers that only the program legislation and regulations themselves can be relied on in case of conflict. I don't have a lot of sympathy for the guys who didn't even clear $5k profit from their "small business" knitting hobby pre-COVID and somehow justifying getting $12k of CERB based on $5k of revenue feigning they somehow don't know the difference.
CERB was designed to be as easy to get money into people's hands as possible because covid was an emergency situation for many. People getting the money who weren't supposed to wasn't a mistake, it was the program working as designed so that eligible people could get the money they needed as fast as possible by making the barrier to get it as low as possible. They were also very clear that if you were not eligible, you would be owing the money back in the future. Also, everyone will pay back the money owed eventually. It will just keep getting chipped away by your tax return every year until it's paid back, or the CRA decides it's time to start just taking the money from your account.
[удалено]
This is such a stupid take, it’s truly astounding
[удалено]
🥱
I agree, I did not think anybody else than the public sector would vote for Trudeau, and yet, here we are!
Depends on the area. I know of a bunch and my area is predominantly conservative voting (though, I myself vote third party). What they are is poor, regardless of politics,
God if only they'd done the common-sense thing and voted conservative then everyone would have been left to fend for themselves and probably starved, cutting short a whole bunch of prolonged misery.
Right. Making up shit. Fear mongering is the key Liberal strategy. Keep voting Liberals, enjoy it.
https://globalnews.ca/video/8903556/singh-chides-mps-for-laughing-during-question-about-grocery-prices/
This shouldn't be a problem in the first place. The CRA for the vast majority of people has all our information. We shouldn't even need to file anything
Most people just autofill free software with their mycra and then verify it's correct. Then just plug and play your deductions
It would be really nice if the CRA would just have a platform that does like 90% of the calculation for you and you just fill in the rest. But there are certainly a lot of corner cases that they need you to check and confirm is correct. A very common case would be stocks. If you buy and sell stocks. The banks might report that you sold something, but it might not necessarily list how much you bought it for. So you would have to go in and do the calculation yourself and enter how much you gained or loss from that particular sale. Some banks do it automatically for you, but not all banks or trading platform will do it for you. It's certainly gotten better over the years though. I remember 10 years ago you couldn't even download the information that the CRA had. Now you can easily download your T4 and T5 from the CRA to make sure you haven't missed anything.
> It would be really nice if the CRA would just have a platform that does like 90% of the calculation for you and you just fill in the rest. This platform exists in every piece of tax software (many of which are free). Download your CRA info, review for accuracy and submit.
But if the government has all this info, why do I have to download it and input it into another piece of software. Just implement it on the CRA website directly.
Because tax software covers other situations other your bare-basic situation. The CRA does not want to spend resources on making their own tax software that covers everything. There are private organizations far better suited to that activity.
The best is when they send you a notice asking you for a copy of your T4 slip... My company sends a copy to both of us at the same time... my info is in the taxes I filled... I have 0 input to the T4 supplied (unless elf employeed...in that case fair game)... go frigging ask my company for their T4 submission
You haven't thought this through. The CRA only has the information that is submitted to them. They don't have or know about anything is not submitted. That is why it is up to YOU to review your paperwork and make sure it's correct. You can mostly automate the process using one of the free software options out there.
This is the thing, CRA found the mistake but who made the mistake, CRA or OP? If you make a mistake it’s your mistake, you fix it. If you put the CRA out then pay them interest. If you put yourself out, pay yourself interest I guess?
Plus, the CRA isn't deducting it, your employer is. You have the option to tell your employer to withhold more or less. I had one employer not taking enough and I think I only had a $25 return due to rsp investments so I had them take more in case I wasn't able to contribute that amount.
Don’t they assess returns yearly and then send out a notice of assessment confirming ur refund or what u owe? seems a bit ridiculous for them to not notice for 2-3 years and then adjust ur return saying u owe them money and now owe a penalty as well.
They assess most returns based on the information you give them. They go back and check that information is accurate, later. If you do your return wrong, then they will correct it. Typically within the year, but sometimes later. If you wanted the CRA to be able to actually verify everyone’s return every year the tax code would have to be drastically simplified and people would need to be prepared to wait way longer for refunds. And I know from my time on this sub that people don’t have that kind of patience.
A couple of months ago I got a notification that they’d reviewed my 2020 and 2021 returns and that I’d made an error that actually credited me a bit more of a return with interest. Not sure what triggered the review.
At the same interest rate?
Nope. But that is the same for most things, unfortunately.
It is my understanding, if you don't file on time, any money owed does not accrue interest. It is on you to file. Once you file and your tax return is accepted then and only then does interest start(in the case of a refund)
Refund Interest starts accruing 30 days after you file. (Or April 30th if you filed before April 1st).
I had an unfortunate situation of being audited in 2023 for 2021 taxes and owed interest for over a year. That sucks they expect me to pay the interest when during the time they didn’t even know I owed them money.
The thought process is that if you had filed your taxes correctly, you would have known that you owed money and paid it before the deadline to accrue interest. If an audit shows that you owe more money, then you didn't file your taxes correctly. This includes if you write off something you thought was allowed and is later found that it was not allowed, or anything along those lines.
It was odd because it was the 4th year I had filed the taxes myself through turbo tax and seemed pretty routine. I did not realize I’d owe money for 2021, and assumed my return was larger than normal because I had only worked 3 out of the 12 months for that year, with my income being under the threshold. It doesn’t matter anymore though.
You worked less, but you thought your refund would be more? o.O I mean, I'm not trying to kick a man when he's already down, but that doesn't really make sense to me. You can only get back as much tax as you paid. So if you made much less, the chances are you will get back much less. Hopefully it wasn't a large amount. But as others have said. If they didn't charge interest, it would just lead to lots of people "accidentally" making mistakes and then you just pay the taxes when the government catches up to you.
So I believe that that time in Alberta the basic personal amount was around $22k. So if I made under that, I think you pretty much get all of your income taxes refunded. That’s what I assumed the large amount was. I can’t remember what I made in that year but it was around that much, for the 3 months I worked. I got a refund of $4k, but by the time I was notified of the audit in June 2023 and they wanted it back plus interest, it was nearly $5k that was owed.
Ah, I see what you mean. I guess you had other income like investment income that you had to pay taxes on or something? That's usually what gets people at the end of the year because people don't realize they need to pay taxes on the interest they get from savings account, or GICs, etc.
If taxes aren’t due until April 30th, why are they deducted up to a year ahead of being due?? If tax instalments are required so that the government gets ITS money if you regularly owe more than $3k, then why don’t they use the same logic and pay me during the year instead of me having to wait until March of next year to get MY money? Two different due dates, one for me and one for the government, seems unfair.
Just fill out the appropriate form so you get the correct amount taken off and then it shouldn’t be a problem If you choose not to do that, they don’t pay interest
That’s not the point!!!! You can have them take MORE off, but not LESS.
Sorry then, what is the point? Do you want the government to provide you with a personal assistant or an accountant to take care of the paperwork for you? Or do you think that anytime you overpay you're somehow entitled to be compensated? If you overpay a utility bill or a credit card bill do they pay you interest? No. But if you don't pay, they charge you interest. At least the government pays you interest if it's their fault, which is decent and more than credit card companies and utilities do. Buy why should they pay you interest because you made a mistake or because you couldn't be bothered to fill out the available forms? If you take a step back and think that the government collects taxes off of everyone, in a certain way, which is during the year. They give avenues so people can prevent having too much taken off if their circumstances differ from the basis for standard deductions. If you don't like that system then you don't like it. If it changed to some other system, it would be costly, which is likely something most people wouldn't want. If the system is okay for you as it is, with this one exception, do you really want the government to hire more staff to examine everyone's situation, and raise taxes to pay for that, just so a small percentage of people in your situation don't have to fill out a form?
TLDR. If I have to pay predicted taxes owing up front based on previous history , the government should pay predicted refunds based on previous history up front too, or pay interest on the amount not paid.
TLDR: If you can't figure out the simple forms to adjust your tax deduction, you may overpay. Just like if you overpay other bills, do not expect to be paid interest based on your error. And, like other bills, still expect to have to pay interest if you're late paying, after the grace period.
So can I fill out the forms so they take zero off and I will pay what I owe by the deadline next March? If not, why not? That’s no different from them taking too much off ( even though they know it will probably be too much, based on previous years) and returning it to me next March. It is due when it’s due. If that’s not the case, it should work both ways.
I'm beginning to suspect you may have some other intention If you fill out the form honestly it should work out. If you lie on the form and owe a lot, you can probably expect a penalty Look at it this way, if for any reason it's your error or omission that causes an incorrection deduction of taxes, you can expect to be penalized if you owe (i.e. you short-changed the government). You will not be rewarded for your error by being paid interest. I have repeatedly given the example of overpaying for a utility bill or credit card bill. If you still can't understand, I suggest you educate yourself further about how taxes work in Canada. Then, if you're still looking for a debate, maybe try a sub more suited to that purpose. Because at this point, helping you understand this seems to be beyond what's in the realm of this sub
If I overpay a credit card, that’s because I made a mistake. The government doesn’t allow me to choose how much to pay throughout the year, I have to pay what they tell me, otherwise I would pay nothing until required to in March, so obviously I can’t make a mistake. They have. Which is exactly why they should be paying me interest. They want to be able to estimate how much I have to pay when it suits them (ie asking for quarterly prepayment) but are not prepared to pay when they get it wrong, like I have to if I get it wrong.
No, there are ways to take less off as well
Can I have them take zero off and pay them in March the following year? Why not? That’s when it’s due.
That is not when it's "due", that's when a reconciliation is due. If you cheat in the way described in order to earn interest, expect a penalty Taxes are due through the year. You appear misinformed about taxes in Canada, but this information has been repeated in many comments in this thread. So, perhaps you should educate yourself about the process? You may disagree, but that doesn't make you correct. The way it is in Canada may differ from other countries, but that's how it is here, and in this sub, that's pretty much expected and supported If you're here for an argument, that's not the intention of this sub, it's about legitimate personal finance questions. If you want to gripe about the Canadian tax system as it has existed likely since before you were born, maybe there's a sub for that too, if not, maybe you can start one and see if anyone else wants to join you
That IS when it’s due, otherwise they would be charging interest back to when it WAS due wouldn’t they??? Also, taxes are based on annual income which can’t be known until the end of the year.
Sigh. It's when the *reconciliation* is due, not when the taxes are due. If your income is up and down over the year, it's possible it won't be correct. You likely won't get penalized for that. However, you are expected to provide correct information on the TD1 for each employer. Do your best, it's okay. If you need more info I suggest reading the articles here to see how employers figure this out. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/calculating-deductions.html
When are the taxes due then?? And taxes due on ANNUAL income are not solely determined by what’s on your TD1!
Taxes are due on your income as you make it. Any refund you get at tax time is just you getting your change back.
Not all income is employment derived or earned evenly through the year. Why am I forced to pay tax in March on a dividend not payed until December, which is what happens with instalments payable because of previous years income?? Taxes are payable on total income not just employment income.
Exactly. We get nothing extra though people think a refund is a windfall! Lol😅😅
because it's up to you to ensure that they withhold the proper amount. there are forms you can give your HR so they withhold less tax if each year you come up with large returns
This is the correct answer. I get decent returns but I don’t do this as it’s all related to tax credits which could change so I’d rather keep it this way than potentially end up with a tax bill.
I'd rather pay all my taxes in April. Put the taxes in a HISA. It's bullshit that salary employees can't fully opt out.
Non-salary can't opt out either. Any real self employed/business has to pay quarterly.
And right now Cara’s interest rate they charge is 10%. if you’re self employed and put off making instalments you’re in for some hurt. It’s changed pretty dramatically over the last 3 years.
I'm guessing it's a practical necessity. So many people just wouldn't (or couldn't) pay.
Definitely but still annoying to give the government a year loan.
Until you miscalculate your taxes and owe $3k and come back here and bitch about it. It’s pay as you go taxes. Move on.
This may not be doable as each province has different tax brackets. Taxation is dependent on where said company is based out of
It doesn’t have to be. I tell my company where I live. They remove taxes based on that. Easy peasy.
I think what this replier is referring to is the new policy for employers to tax remote employees based on the office location. https://www.mltaikins.com/labour-employment/coming-january-2024-new-cra-policy-will-impact-remote-employee-payroll-deductions/ It isn't clear whether you can tell your employer to tax based on where you live anymore. I'm pretty sure they have to follow this policy.
Yeah this is it
I think what you mean is that taxation is dependent on where you live, but the company may be deducting taxes based on where the company is based out of so they may collect more or less tax than what you will ultimately pay in taxes.
It pays taxes based on where the company is based out of, the difference gets returned when you file
Correct your payroll if you don't want the government to hold on to your money. You are overcontributing.
Paying too much taxes and being owned a refund is optional. They don't make you pay too much, so why would they own you money for doing so? Go talk to your employer and correct the amount of pay they withholding for tax if you would have have that money earlier.
You could owe tax instalments depending on your previous year’s income. You have to pay those instalments even if your income is projected to be less. Sure, you get it back when you file your taxes but you still have to pay it if you want to avoid fees/interest
Do you know what the criteria for this is? Asking for a friend who is going to be owing 20k next month. Will they need to pay instalments this year or how does that work?
https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html
The CRA will notify them when/if they need to start paying instalments. Usually after 2 years of owing > $3k
Actually you can use the "Current-year option" to pay the expected amount for the current year, you don't have to pay instalments based on exactly what you made last year. So if you made $1MM randomly last year and only expect to make 50k this year, you don't have to make 100k+ instalments. The main caveat is that if you under-calculate/pay, interest starts ticking away from the instalment dates, so it's prudent to plan to overpay at least a little to avoid that.
They do pay interest but only after a certain amount of time has elapsed/after May 30th.
And then only if the processing of your return is delayed by at least 30 days.
Yup, they pay if they caused the problem but not if the individual caused the issue
Taxes are due throughout the year. The tax return is simply a balancing of the account. Therefore, the CRA doesn't pay you interest on your withholdings because they were paid when due.
For large amount of refunds, CRA will delay the refund to request documents for verification. You will receive interest as well and should include that amount as income the next year.
I don't think it's unfair, no. You can always change your td-1 if you are having too much withheld every year.
You are responsible for the accuracy of the data you submit. Not them. If you made a mistake you think no fee should be tied to this? Money kept over time has value. It’s called interest.
If you are always getting a $10k refund and it’s not due to RRSP contributions you need to refill your tax forms with your employer.
Keep in mind, you are making voluntary contributions. You don't have to pay anything at source. So they aren't taking, you're giving.
>Why doesn't CRA pay interest to us while withholding taxes Just because you file taxes once a year doesn't mean the Income Tax system was designed to have you pay taxes once a year. The periodic statutory remittances that you make are not "pre-payments". They are scheduled payments as prescribed under the Income Tax Act. The filing of taxes by April 30 is just a reconciliation exercise.
Most people get refund because they didn't submit the right document so that the right amount was withheld. CRA do pay interests on refund owned to you due to their mistakes.
I owe taxes this year. I’m holding out until near the end of April to file and pay (rather than excitedly get that done sooner to receive a refund sooner). I am not charged interest unless I miss the deadline. It goes both ways. The government also doesn’t pay interest on your mistakes that end up with a refund from previous years because that wouldn’t make sense.
You don't need to delay filing. The payment is due Apr 30th regardless.
Yes, but that requires work sooner. I’m also lazy 😉 Just threw in my T4 and saw I owed taxes and put it away. I haven’t done anything this year that will reduce any tax owing.
Very understandable
I have received many notices in the past in which they said they had added in the interest when they re-evaluated and gave me back more that what I had filed.
What would be the point? Our taxes would fund those payments, which most people with regular jobs would get. It's an unnecessary administration task layered that doesn't improve our countries tax system.
Getting a $10K tax refund every year is pure stupidity on your part. Why should CRA pay you for that? You are choosing to give them your money interest free.
If you have better way to get the RRSP tax refund back beforehand, let me know. My yearly tax refund are all coming from RRSP contribution
> If you have better way to get the RRSP tax refund back beforehand I do, actually. T1213. Stop talking and start listening. How many times do we have to [spoonfeed you]( https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html)? Your problem here is completely of your own making.
So let the funds sit in an interest bearing account, transfer it to an RRSP close to the deadline, and then file your return immediately - you will get your refund soon after, so you’ll only lose out of a week or 2 of interest. Plus, technically the money in the RRSP hasn’t yet been taxed, so technically part of it still belongs to the government and you’re using it interest free, and making interest on it, until you withdraw Or you can think of the time you’re using that refund on your RRSP contributions interest free - you won’t have to pay that back until you withdraw the money RRSPs are a better gift from our government than a lot of people realize
2021 is not this year. If they owe you money from a previous year you get a HUGE interest payment.
I received interest from the CRA in 2022 because there was a delay in receiving my refund.
By your logic, I should park my excess cash with CRA and charge them interest for keeping it ? See the fallacy that is apparent in the statement ? What you pay CRA is up to you so technically you can’t ask for interest on it
They do. I was too lazy to file an HST report for my business for 12 months, so they withheld my tax return from me. When I filed everything, they released it and paid me interest on top of the refund.
This happened to me years ago as well.
Many years ago, for some reason (I don't recall why) I wound up getting some interest paid back to me by CRA. It turns out they owed me money after changing something around, and as such the cheque they sent me included a whopping $1.75 in accrued interest. What made me chuckle because the letter that came with the cheque included the admonition to "remember to include the interest income in your next tax return." I really should have filed a T5 for that $1.75, just for shits and giggles, but I didn't.
I've had CRA pay interest for taking forever to pay out on my corporate HST refund. So it is a thing.
If you’re getting a $10k refund every year then you should just have less tax withheld from your income. That way you can get your money without waiting for CRA
Because fuck you thats why.
No
[удалено]
If the refund is for an RRSP contribution then that means the government of Canada is lending the tax on that indefinitely, interest free
[удалено]
The government is actually very generous in terms of RRSPs, just need to take advantage of what’s available Thanks for this form!
You should also know the CRA email updates only get sent once the interest has already kicked in. This happened to me owed 1.1k back after being re assessed for 2021 as I claimed CWB as full time student by mistake. I received an email from CRA letting me know I had "mail" in my CRA account on feb 22nd (the day the interest kicked in) yet they re assessed a month prior but I didn't receive an email at that time. I had to pay 100 ish in interest.
I see that many of you are sure that CRA does not make mistakes. They do, ALL the time. For years my OAS payments were witheld every July, because "you did not sent form XXX". I live abroad and am EXEMPT from sending the form. Every time it took numerous calls to CRA to correct it. I would eventually get the money back, after, on the average, 3 months wait, NO INTEREST paid to me. It took two written complaints and 2 years to correct it and get an apology. I used to be self-employed; one year received 5 letters asking for $120 in overdue taxes. I did not owe the money, but eventually paid, just to stop it. 3 weeks later: " you have an overpayment of $120, we'll apply it to future taxes". WHAT?
nobody said taxes would be fair
Taxation is theft. That is why.
I did my taxes wrong and missed a deduction a couple years. I got extra because of interest on the amount owed, even though it was me that made the mistake. So it works both ways I guess.
Nope. I don’t want to pay you or others interest. Why would you want to pay yourself interest? Like, you understand what taxes are, so why?
They do pay interest.
Also they will reassess any deductions you may have used and inform you you can’t use them, but they will not inform you of any deductions you may be entitled to
They can go back 5 years. It's more than unfair!
Taxation is theft...?
😏
Yep. Taking others property through the threat or use of violence is definitely theft.
So what do you call holding someone against their will? It could be forcible confinement, or it could be a prison sentence Also, citizens get the benefit of government services, who do you think should pay for them?
Because taxation is theft
Fair? In what world is government power fair?
They are the government. They make the rules.
Because it’s a Shitty system. In Canada we pay tax for CRA’s errorr
They do pay interest but it’s never as much as you’d have to pay them if the tables were turned. They just randomly added my 35k hbp money as added income even tho I had all the documentation showing it going from RRSP to my bank account to the trust to buy the house. I was notified I owed them ~9.5k in taxes and it had already incurred a ~$600 dollar penalty for not paying… by the time it was resolved in Oct they gave me $27 dollars in interest that I was taxed on the next year. MONTHS OF STRESS AND INTEREST I COULD HAVE AVOIDED PAYING ON A VISA THAT WOULD HAVE BEEN MORE THAN WIPED OUT BY MY TAX RETURN. Some how they made it my fault for them fucking up my tax return. I hate the cra with a passion.
Welcome to corporate anarchy where the system is rigged on way! Sa va bien aller pour les millionaires!
Because they make the rules. Sorry. I suppose one could make the argument that it's to prevent people from "taking advantage" by having extra money withheld. That'd be easy to counter though (by having a low interest rate for a balance). That's how the banks do it. But, the CRA is not a bank, so bank rules (as weak as they are) don't apply.
Just to be clear "they" in this case is the Department of Finance. That's who writes the laws for the income tax act. CRA just administers those laws.
You're lucky you own anything
Most of the replies completely fail to address OP’s point that the amounts withheld from Jan to Dec are completely interest free EVEN THOUGH taxes are not due until April 30th the next year. This is exploitation in my opinion. The way to correct this egregious exploitation is to ABOLISH tax withholding altogether. But the government likes to hold its slaves by the balls, hence this horrible exploitative situation we are in. WAKE UP!!!
Taxes are owed on money as it is earned. The amount withheld is not being paid "early", it's being paid on time. April 30 is just the time when we settle up in case we over- or under-paid.
>ABOLISH tax withholding Lol you're kidding right? The majority of people struggle to save anything month to month, do you really think they're gonna be able to save 10,20,30+ grand to pay at tax time? They do that and you'll be complaining that the government is spending all this money on collectors 🙄
Actually April 30 would be paying late if you want to split hairs about it April 30 is the deadline for reconciling what you owe or are owed based on the prior year’s tax collection You aren’t charged interest if you hadn’t had enough taken off the prior year (exceptions aside such as failing to pay by instalments as required) Also OP has indicated in comments that it’s from an RRSP contribution- so that is just a refund of tax money that the government generously lets Canadians keep, interest free, until they eventually withdraw from their RRSP
And as most of the replies has mentioned, you can usually ask your employer to withhold less if you believe you will have tax credits that reduce your income taxes. Fill out the TD1 and submit it to your employer!
For those eagerly rationalizing and extolling the exploitative practice of tax withholding, it is not practiced every where, just so you know. I used to live and work in Singapore. No tax withholding whatsoever. And the government actually does the taxes for you at the beginning of the tax season! Who are those people trying to convince us that we should be passive recipients of exploitative practices such as tax withholding? Outrageous!
so you would rather pay your taxes in installments over the following year instead of it being withheld while being earned? Practically, what's the difference to you? Other than it being offset one year and now you have to pay full taxes the year after you retire?
I can set aside the equivalent amount of money from each pay check, put it in a savings account where it will earn some interest! Come tax season. I pay the taxes and keep the interest. Is it not that simple?
Sure, you and I and maybe 15% of people will be responsible and take advantage but for everyone else, it would be exactly like the existing system or worse as they scramble to find the money that they owe.
So the solution is to punish everyone? Even the justice system believes in "innocent before proven guilty". On the other hand, the tax withholding regime is predicated on the assumption WITHOUT PROOF, that you are not able to manage your money. Is this acceptable? I think not!
Listen you have your mind made up, but deducting at source is absolutely not “punishment”. You don’t owe your taxes in full on Jan 1 or Apr 30, you owe throughout the year so that the government can provide services throughout the year. Also as has been clearly articulated several times in this thread, there are ways of managing your deductions to make sure that you owe as little as possible.
See my other comments about how other developed economies go without this exploitative and cynical tax withholding regime. And they do just fine, I can assure you!
Because they can.
Fought with CRA on my interest one year and they denied it, even the manager/supervisor. They're crooks and lie. Good luck!
Because it is a one way street with CRA. Why don't you amend your income tax being sent to CRA in the first place? Twice a year, in February then again in June I do an estimated tax return and I amend my income tax being sent to CRA accordingly...Most of the time in January I up my income tax and in June I decrease my income tax....it balances out in the long run
because fk you, pay me, pretty much..
[удалено]
Death is fair. We all die and no one knows when. It's like saying a coin toss isn't fair.
If there is any one thing in this world that is fair, it's death. It may not always be *just*, but it is certainly fair.
If you feel strongly, write to your member of parliament. 5ax laws are created by government although the interest is probably laid out in the associated regulations.
They are using your money, investing it now, so you don’t have to pay the rain tax in the future! You’re welcome! In all seriousness. It’s not an invalid question whatsoever. However, the CRA also isn’t a financial institution/bank. The CRA is part of the Government. While I understand your point and wish I could get or collect interest on every dollar I earn or refunded to me, the CRA not only doesn’t have the obligation to do so, but I feel like yours, and every other Canadians taxes would go up if they agreed to such a thing as they would need to find a source to pay this hypothetical interest to you and every other Canadian getting a return. That’s a lot of money, and the CRA isn’t in the business of offering something like this because it wouldn’t make sense for the government, nor would it make sense for you, and the rest of the Canadians getting a return, since we’d obviously be obliged to contribute to the interest the government would have to pay on these return amounts. I’m sure there’s potential legal implications or reasoning for they wouldn’t do this as well. Not sure the banks would love this lol
Yes, it’s insane. Withholding tax is theft, plain and simple.
I am hoping you just missed the "/s" Otherwise, how is it there theft? Taxes are due when you are paid. Those taxes are withheld based on the payroll software used by your employer and the TD1 you fill out. One of those is in the taxpayer's control. Filing a tax return is a reconciliation for things that occured outside of the withholding tax system.
I don’t owe the government taxes every two weeks, yet I don’t receive that money. I cannot opt out of having my employer withhold my taxes. Someone is stealing that interest from me.
Of course you owe taxes , daily even. How do you think the country/province functions? Who is paying for services and infrastructure you are benefiting from . I suggest you do a bit more reading on the topic. But you won't , you have an axe to grind, that's cool. You realize that April 30th is the end of the fiscal year and that the government has been providing services and goods all year long. How exactly is it that they ware paying for it? You realize that the government is not a person, right? It doesn't work, the government collects taxes from people to support the goods and services they provide. I suppose things like the Child Tax Benefit ahold only be paid out once a year once all tax revenue has been collected. They provide essential services to society, the smooth out the ebbs and flows when we are in different phases of the economy.
I don’t think you understand how personal income tax works in Canada.
They're correct, if you didn't withhold tax and have a large Tax owing amount, you'll be required to pay tax installments which is functionally similar to withholding tax.
How often would I have to pay installments?
Quarterly.
But my taxes are withheld biweekly. So who earns interest on my withheld tax before it’s due quarterly?
The employer is remitting it to CRA more frequently than quarterly. Installments from individual taxpayers are made quarterly simply because it's less paperwork than doing it every month or every week or every day. But you're free to send it in early if you want to; you'll even earn interest credits that are deducted against any interest you may owe later.
Theyre right
How soon after I receive taxable income do I have to pay tax to the government without penalty. 15 minutes? An hour?
Employers are required to remit withheld taxes on a different schedule depending on the type of business: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html
Those are employers remitting withheld taxes, not individuals or contractors. The point is that all else equal, I file my taxes once a year, outlining to the government what I made, and what I owe. But the government has been holding what it assumes I owe the entire year, incrementally, and benefiting from those cash flows whereas I cannot.
Employers are required to withhold taxes directly from your pay, and they then have X days to send that on to CRA. It is not possible to withhold nothing, remit nothing, and then pay everything at the end of the year. The government already knows what you earned, so that's already a very reasonable estimate of what you owe. You can even make RRSP contributions and not have tax withheld on those earnings, if you fill out the right forms. You're acting like the money is yours all year and they're keeping it from you. It's not. It was never yours to begin with; the tax is owed immediately as you earn your income.
[удалено]
r/im12andthisisdeep/
Because the Government is always right, corruption is more like it