Did you know that if you can’t pay your taxes, you may contact the Canada Revenue Agency about a payment arrangement?
If you can’t pay the full amount of taxes you owe to the Canada Revenue Agency (CRA), you may be able to make a payment arrangement. If we determine that you are unable to make a full payment, an agent can work with you to develop a plan to help you pay your taxes.
Here are some important questions:
I owe more than I can pay. What do I do?
If you have reasonably tried to pay your taxes owing, contact the CRA to make a payment arrangement by:
- calling the CRA Debt Management Call Center at 1-888-863-8657
- making a pre-authorized debit payment using My Account
- calling 1-866-256-1147 to make a TeleArrangement
For more information, visit Payment Arrangements.
How do I make a payment?
There are several different ways to make a payment on your taxes. You can pay:
- through My Payment, a secure, online payment service available on the CRA Web site
- through your financial institution by Internet or telephone banking
- by mailing the CRA a cheque or money order
- in person at a Tax Services Office, using a cheque, money order, debit card, or cash (exact change is required).
For more information, see Electronic payments for individuals.
What happens if I pay my taxes late?
If you think your payment will be late, contact the CRA as soon as possible. Late or insufficient payments can result in interest charges. Interest is calculated on the amount owing starting on the date the payment is due, and is compounded daily at the prescribed rate. You should always try to pay as much as you can on time. This will reduce the amount of interest you will be charged.
The CRA sets the interest rate on a quarterly basis. The current quarterly prescribed interest rate charged by the CRA is 5%.
Are there other consequences of paying or filing late?
Late or insufficient payments and late returns can also result in penalties being charged. The amount of the penalty will depend on various factors, including how late the payment or return is, how much is owed, and whether you have been late with a payment or return in the past.
Depending on the situation, you may face other consequences as well. For example, if you are entitled to a refund, the CRA could withhold your refund or family benefits, such as the GST/HST credit, until you file all outstanding returns. Furthermore, the CRA can withhold some or all of your refunds and apply them to other amounts you owe.
Last year, through the CRA Debt Management Call Centre, some 296,000 payment arrangements were made with individual taxpayers who were unable to pay their taxes when due. They met their tax obligations by filing on time and concluding a payment arrangement for amounts due.
Source: Canada Revenue Agency