Blog Posts, Tax

A Guide for Canadian Tax Deadlines and Installments

Canadian Tax Deadlines

Updated December 7th, 2022

Canadian tax deadlines are confusing.

In this blog post, we will outline tax deadlines for individuals and corporations. If you have a habit of forgetting your tax deadlines, make sure you bookmark this post for future reference, both now and for every tax filing season!

For illustrative purposes, we’ve assumed that the taxation year for all individuals and companies below starts on January 1, 2022, and ends on December 31, 2022. Here are the key dates for tax season aligned with that period.

Canadian Tax Deadlines (Quick Guide)

Here are the quick deadline facts for both employed and self-employed individuals in Canada.

Employed individuals

If you work for an organization that is not your own (you have a job), the time of filing and filing methods are a bit different than some others.

  • Taxation Year: January 1, 2022, to December 31, 2022
  • Filing Deadline: April 30, 2023
  • Payment Deadline: April 30, 2023

Self-employed individuals

  • Taxation Year: January 1, 2022 to December 31, 2022
  • Payment Deadline: April 30, 2023
  • Filing Deadline: June 15, 2023

Self-Employment Income Tax Installments

The CRA requires that if your taxes owed for the prior year were $3,000 or more – you must make quarterly installment payments.

This is determined by taking the amount of income tax you paid last year and dividing this amount into 4 and paying this amount to the CRA on a quarterly basis.

Example

If you paid $4,000 in income tax in 2021, for 2022, you will be required to make tax installment payments.

These installment payments will be calculated by taking the income tax you paid in 2020 and dividing this amount by 4.

Therefore, for 2022 – the installment amounts will be $4,000 / 4 = $1,000 per quarter.

The payment of $1,000 will have to be made on:

  • March 15, 2022
  • June 15, 2022
  • September 15, 2022
  • December 15, 2022

The dates above are specified by the CRA.

GST/HST

If a company’s corporate yearend is not December 31, 2021, you have the option to choose the yearend for GST/HST.

You can choose to set your GST/HST yearend to be: (1) The same as the company’s yearend, or (2) use the calendar year.

You should know that you’re required to file your GST/HST even if you don’t have any activity during the period.

How frequently do you file your GST/HST return?

If your revenues are:

  • Less than $1,500,000 you HAVE to file annually and have the option to file quarterly/monthly
  • Between $1,500,000 and $6,000,000 you HAVE to file quarterly and have the option to file monthly
  • Above $6,000,000 you HAVE to file monthly.

When is your GST/HST return due?

For annual filers, the GST/HST return is due 3 months after year-end

For quarterly/monthly filers, the GST/HST return is due 1 month after the end of the month

When do you pay?

Payment of your GST/HST is due on the same date as your return

GST/HST Installments

Installment payments are not something that quarterly and monthly filers have to worry about – this applies to annual filers.

For annual filers, the CRA requires that if your GST/HST balance owing for the prior year was $3,000 or more – you must make quarterly installment payments. This is determined by taking the amount of GST/HST you paid last year and dividing this amount into 4 and paying this amount on a quarterly basis. The installment payments are due one month after the end of each quarter.

For example, if your company has a calendar year-end (i.e. December 31), your payments will be due on April 30, July 31, October 31, and January 31.

If you’d like to learn more about GST/HST, check out our blog post here.

Example

If you paid $8,000 in HST in 2020, for 2021, you will be required to make tax installment payments.

These installments payments will be calculated by taking the HST you paid in 2020 and dividing this amount by 4.

Therefore, for 2021 – the installment amounts will be $8,000 / 4 = $2,000 per quarter.

This payment of $2,000 will have to be made on:

  • April 30, 2021
  • July 31, 2021
  • October 31, 2021
  • January 31, 2022

Corporate Tax

Your corporate income tax return (T2) is due 6 months after year-end. Let’s look at a couple of scenarios to understand how this works.

  • If your year-end is December 31, 2021, your return is due on June 30, 2022
  • If your year-end is March 31, 2022, your return is due on September 30, 2022

However, although your return can be submitted later, your tax payment is due sooner.

Tax payments need to be made 2 months after year-end and in some cases can be made 3 months after year-end.

You can make a payment 3 months after year-end, if your corporation meets the following requirements:

  1. The corporation is a CCPC (Canadian Controlled Private Corporation)
  2. The corporation claimed the Small Business Deduction in the current or previous year
  3. The corporation (and associated corporations) have taxable income less than $500k in the previous year

Corporate Tax Installments

For a new corporation, you do not have to make installment payments until you have started your second year of operation.

Your first tax year should start on your incorporation date.

In your second year of operations, like GST/HST tax installments, the CRA requires that if your corporate income tax balance owing for the prior year was $3,000 or more – you must make quarterly installment payments for taxes on business income.

These installment payments can be determined using one of three methods:

  1. Estimating the current year’s taxes payable
  2. Based on last year’s taxes payable
  3. A combination of last year’s taxes payable and the year before last year

If you’re confused about which option is appropriate for you, feel free to send us an email with your questions at: info@verticacpa.ca

These installment payments can be made on a monthly or quarterly basis.

Each payment is due on the last day of the month of the quarter. Below is an illustrative example.

Example

Acme Inc.’s tax year starts on January 1, 2021 and ends on December 31, 2021

Monthly installments would have to be paid on:

  • January 31
  • February 28
  • March 31
  • April 30, and so on.

Quarterly installments would have to be paid on:

  • March 31
  • June 30
  • September 30
  • December 31

Other Things to Know About Tax Filing Season

Is there a late filing penalty?

Yes. According to the Canadian government’s website, “You will be charged interest on any taxes you owe if you pay late.”

Interest is on the amount you owe that’s late. This interest is in addition to the penalties and fees. Depending on when you pay against the deadline for filing, there is a percentage fee based on certain things.

For example, in 2021, the late penalty was 5% of the amount paid late, with an additional 1% for each additional month the payment is late.

What is a Notice of Assessment (NOA)?

A Notice of Assessment is a report about your taxes the Canada Revenue Agency (CRA) sends to taxpayers each year. Similarly, a notice of objection is a method taxpayers and businesses have to object to the CRA’s assessment.

Let us help you. Do you have questions about tax deadlines? Email us: info@verticalcpa.ca

The accounting and tax information provided in this post does not constitute advice and is meant to be for general information purposes only. The information is current as at the date of this post and does not reflect any changes in accounting and/or tax legislation thereafter. Moreover, the information has been prepared without considering your company or personal financial/tax circumstances and/or objectives.

2 thoughts on “A Guide for Canadian Tax Deadlines and Installments

Leave a Reply

Your email address will not be published. Required fields are marked *