What is this and why do I have to pay money?!
You may be confused with correspondence from CRA regarding tax instalments, so here is a brief rundown of what they are, when they are due, and some frequently asked questions.
What ARE tax instalments?
Tax instalments are payments you make throughout the year to cover the taxes you normally pay in one lump sum on April 30 of the following year. You pay these instalments during the year while you are earning the income, similar to how an employer deducts tax directly from each pay period.
You may have to pay tax instalments for next year’s taxes, if your net tax owing is more than $3,000 (for Quebec $1,800) for 2022 and in either 2021 or 2020.
When will I have to pay tax instalments?
Tax instalment payments are due by the following dates (except farmers and fishers who have one due date on December 31):
- March 15
- June 15
- September 15
- December 15
What if I miss a payment?
If you miss a payment, or do not pay the full expected amount, you will be charged instalment interest. In addition to paying interest, there is also an instalment penalty that could be applied if you miss a payment and your instalment interest charges for 2022 are more than $1,000.
How do I pay my tax instalments?
You can pay your tax instalments online, in person, or by mail. There are several payment options with different processing times for each.
CRA website for all the options for paying: CRA- Paying Tax Instalments
For more information on tax instalments, including who has to pay, how to calculate or reduce your instalment payments, and how to claim tax instalment amounts on your tax return: visit CRA: Tax Instalments for Individuals