Income Tax Instalments

PERSONAL TAX INSTALMENTS

Instalments are periodic payments of income tax that individuals have to pay the Canada Revenue Agency (CRA) to cover tax they would otherwise have to pay on April 30 of the following year.

 

WHO HAS TO PAY?

  • You have to pay your income tax instalments for 2018 if your net tax owing is more than $3,000 in 2018; and in either 2017 or 2016

 

INTEREST AND PENALTY CHARGES

Instalment interest is charged if ALL of the following conditions apply:

  • CRA sends you an instalment reminder in 2018 that shows the amount to pay
  • You are required to make instalment payments in 2018; and
  • You choose not to make instalment payments, or you make payments that are late or less than the required amount

Instalment interest is compounded daily at the prescribed interest rate.

You may also have to pay a penalty if your instalment payments are late or less than the required amount. CRA applies this penalty only if your instalment interest charges for 2017 are more than $1,000.

For more information click here.

 

CORPORATE TAX INSTALMENTS

Generally, corporations have to pay their taxes in instalments. An instalment payment is a partial payment of the total amount of tax payable for the year.

 

WHO HAS TO PAY?

  • You have to pay your income tax in instalments for 2018 if your federal tax owing is more than $3,000 in 2018 or in 2017. Similarly, you have to pay your income tax in instalments if your provincial tax owing for the current or previous year is more than $3,000
  • Corporations generally make monthly or quarterly payments towards their tax liability. A small Canadian Controlled Private Corporation (CCPC) is eligible to make quarterly instalments under certain circumstances

 

DUE DATES

  • Instalment payments are due on the last day of every complete month of your taxation year, or of every complete quarter if you are an eligible small CCPC

 

PAYING INSTALMENTS

  • Instalments may be paid by telephone or internet banking, at your financial institution or by mail

 

INTEREST AND PENALTY CHARGES

  • Interest is charged on late or insufficient payments. Instalment interest is compounded daily at the prescribed interest rate
  • You may also have to pay a penalty if your instalment payments are late or less than the required amount. CRA applies this penalty¬†only if your instalment interest charges for 2018 are more than $1,000

For more information click here.

 

Harmonized Sales Tax (HST) Instalments

HST registrants who are annual filers are required to make quarterly instalments if their net tax payable for the preceding year is more than $3,000.