Frequently Asked Questions

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Q: How long should I keep my income tax records?
A: Generally, you should keep your supporting documents for six years. Have the receipts and documentation to support your claims ready in case you are selected for review. For more information, see the General Income Tax and Benefit Guide and Information Circular IC78-10R4 Books and Records Retention / Destruction.

Q:What if I can't afford to pay the tax I owe?
A: Even if you can't afford to pay the income tax that you owe, you should file your tax return by the annual deadline in order to avoid any late-filing penalties. The late filing penalty is 5% of the balance owing, plus 1% of the balance owing for each full month that your return is late, to a maximum of 12 months (that would be a total penalty of 17% of the balance owing). If you have incurred late-filing penalties in any of the three preceding taxation years, your late filing penalties are doubled. For more information, see CRA's web page Interest and the Late Filing Penalty.

After you file your tax return, you will be sent an assessment notice from Canada Revenue Agency (CRA) which shows the balance of tax owing. After the payment deadline, interest will accrue on this balance at the CRA prescribed rate of interest, compounded daily. The current interest rates can be found on the CRA Prescribed Interest Rates page. You can communicate with CRA to set up a payment schedule for the taxes owing.

Q: What province do I have to file my taxes in?
A: Under normal conditions, a person files a tax return for the province in which they are residing on December 31 of the taxation year. Sometimes, a person may be considered to be a resident of a province even if they have temporarily relocated to another province. This could happen if the person was employed in a temporary job, or was a student in a province where they do not normally reside. A person will be determined to be resident in the province in which they have the most significant residential ties. For more information on this, see the Canada Revenue Agency (CRA) Interpretation Bulletin IT221 Determination of an Individual's Residence Status. This bulletin deals with residency in Canada, as well as province of residence.