Interest and penalties
COVID-19: Tax filing and payment deadlines for 2019
The deadline for individuals to file is extended to June 1, 2020 and the deadline to pay amounts owed is extended to September 1, 2020. Penalties and interest will not be charged if amounts owed are paid by September 1, 2020.
Note: some taxpayers may have received a 2019 Notice of Assessment that says the deadline for payment is April 30, 2020, which is incorrect.
If you have a balance owing for 2019, the CRA charges compound daily interest starting May 1, 2020, on any unpaid amounts owing for 2019. This includes any balance owing if the CRA reassesses your return. In addition, the CRA will charge you interest on the penalties starting the day after your filing due date. The rate of interest the CRA charges can change every 3 months. See Prescribed interest rates.
If you have amounts owing from previous years, the CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.
If you owe tax for 2019 and you file your return for 2019 after the due date, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2019 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
If the CRA charged a late-filing penalty on your return for 2016, 2017, or 2018 your late-filing penalty for 2019 may be 10% of your 2019 balance owing, plus 2% of your 2019 balance owing for each full month your return is late, to a maximum of 20 months.
Even if you cannot pay your full balance owing on or before June 1, 2020, you can avoid the late-filing penalty by filing your return on time.
Repeated failure to report income penalty
If you failed to report an amount on your return for 2019 and you also failed to report an amount on your return for 2016, 2017, or 2018, you may have to pay a federal and provincial or territorial repeated failure to report income penalty. If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
The federal and provincial or territorial penalties are each equal to the lesser of:
- 10% of the amount you failed to report on your return for 2019
- 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report
However, if you voluntarily tell the CRA about an amount you failed to report, the CRA may waive these penalties. For more information, see Voluntary Disclosures Program.
For residents of Quebec, only the federal penalty will be applied as the provincial tax is assessed by Revenu Québec.
For non-residents and deemed residents of Canada, the provincial or territorial penalty will be applied only if provincial or territorial tax is payable.
False statements or omissions penalty
You may have to pay a penalty if you, knowingly or under circumstances amounting to gross negligence, have made a false statement or omission on your 2019 return.
The penalty is equal to the greater of:
- 50% of the understated tax and/or the overstated credits related to the false statement or omission
However, if you voluntarily tell the CRA about an amount you failed to report and/or credits you overstated, the CRA may waive this penalty. For more information, see Voluntary Disclosures Program.
Cancel or waive penalties or interest
The CRA administers legislation, commonly called the taxpayer relief provisions, that gives the CRA discretion to cancel or waive penalties or interest when taxpayers are unable to meet their tax obligations due to circumstances beyond their control.
The CRA’s discretion to grant relief is limited to any period that ended within 10 calendar years before the year in which a request is made.
For penalties, the CRA will consider your request only if it relates to a tax year or fiscal period ending in any of the 10 calendar years before the year in which you make your request. For example, your request made in 2020 must relate to a penalty for a tax year or fiscal period ending in 2010 or later.
For interest on a balance owing for any tax year or fiscal period, the CRA will consider only the amounts that accrued during the 10 calendar years before the year in which you make your request. For example, your request made in 2020 must relate to interest that accrued in 2010 or later.
To make a request fill out Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest.
For more information about relief from penalties or interest and how to submit your request, go to Taxpayer relief provisions.
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