Settling Your Earnings Levy

The full amount of income tax that is owed for a specific year must be paid on or before April 30 of the following year. For this year, individuals are required to remit their income taxes for the year 2017 to the Canada Revenue Agency (CRA) by Monday, April 30, 2018. No exceptions will be made and extensions will only be granted under extraordinary circumstances.

Unsurprisingly, the CRA strives to simplify the process of tax remittance for taxpayers by offering a variety of payment methods. In fact, there are at least seven options available to residents of Canada to pay their taxes for the 2017 tax year. The following are the options available for taxpayers to make a payment to the CRA:

Utilize online banking to make the payment

Millions of Canadians conduct their banking activities online through their respective financial institutions. A comprehensive list of financial institutions that support payments to the CRA can be found at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-online-banking.html, which includes all major banks and credit unions in Canada.

The specific steps involved in making the payment may vary slightly depending on the online payment system of each financial institution. It is important to specify the nature of the payment (i.e., current year tax return or current year tax instalment payments) and provide the taxpayer's social insurance number to ensure that the payment is credited to the correct account.

One does not need to access any specific CRA form to make an online tax payment through their financial institution.

Pay at your financial institution

For individuals who do not use online banking or prefer to make the payment in person, it is possible to pay the owed tax amount at a bank. However, this requires the taxpayer to possess a personalized remittance form.

Since the remittance form is tailored to the individual taxpayer, it cannot be directly printed from the CRA website. However, taxpayers who wish to obtain a personalized remittance form can do so by contacting the CRA's Individual Income Tax Enquiries line at 1-800-959 8281 and requesting to have the form sent to them via mail.

Use the CRA's My Payment service

The CRA provides an online payment service called My Payment, which does not incur any fees and does not require registration for any other CRA online services.

To use My Payment, it is necessary to have a debit card from a participating Canadian financial institution with a VISA Debit, Debit MasterCard, or InteracOnline logo. My Payment only accepts payments made with these specific cards. Prior to using My Payment, ensure that the payment amount falls within the daily or weekly transaction limits imposed by the financial institution.

More information about this payment method, including a list of participating financial institutions for each card type, can be found at https://www.canada.ca/en/revenue-agency/services/e-services/payment-save-time-pay-online.html.

Make a payment using a credit card

Although it is possible to pay taxes using a credit card, payments can only be processed through third-party service providers. Direct payments by credit card to the CRA are not accepted. Please note that third-party service providers may charge a fee for this service.

The CRA website provides links to only two approved service providers for credit card payments, which can be accessed at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-credit-card.html.

Payment through a service provider Numerous third-party service providers are available to accept and remit tax payments on behalf of taxpayers to the CRA. However, most of these services are primarily oriented towards businesses, and only a few listed on the CRA website handle individual income tax payments.

You can find the complete list of external service providers on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-a-service-provider.html.

Paying taxes through pre-authorized debit (PAD) is an option that allows the CRA to withdraw the owed tax amount from your account on specific dates authorized by you.

If you already make instalment payments of taxes throughout the year, you may already have a PAD arrangement in place, which you can use to pay any remaining balance for the 2017 tax year. However, this arrangement must be made at least five business days before the payment due date of April 30. If you only make tax payments once a year, it may be more suitable for you to explore other payment methods.

This year, taxpayers who have their tax return prepared and e-filed by an authorized electronic filer have an additional option. They can request the e-filer to set up a PAD agreement on their behalf for a one-time payment of the current year's tax amount owed. More information on how to make this arrangement can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.

If you prefer to pay in cash or with a debit card, it is still possible to do so at Canada Post outlets, not at CRA offices. However, there are specific requirements for this payment method. To make such a payment, you will need to create a QR code by following a link provided on the CRA website at https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/pay-canada-post.html. At the Canada Post outlet, a clerk will use the QR code to process your payment. Please note that service fees apply to this payment method.

It's important to remember that the CRA requires the payment to be received by the April 30 deadline. The payment is considered made when it is actually received by the CRA or by a member of the Canadian Payments Association, which includes most Canadian financial institutions.

Most payment options available to Canadians involve online transactions or the use of third-party service providers. These methods may result in a delay in the CRA receiving the payment due to processing time. Therefore, it is advisable for taxpayers who choose these methods to consider this delay and make their payment accordingly. Waiting until April 30 to make the payment may not be a good idea.

Taxpayers who make their payment in person at a financial institution using a personalized remittance form can make their payment on April 30, as the date stamped on the form is considered the date of receipt by the CRA.

The wide range of tax payment methods available to individual taxpayers can be confusing. The CRA provides a chart on its website that outlines each payment method and the types of payments that can be made through each. You can find this chart on the CRA website.

Please note that the information provided here is general in nature and may not include all details and special rules. It is also only valid as of its published date and should not be considered legal or tax advice. For more information specific to your tax or financial situation, please contact our office. Virtus Group LLP is the largest independent CPA accounting and business advisory firm in Saskatchewan, with offices in Saskatoon, Regina, and Estevan. We offer comprehensive services to assist you and your business. If you have any questions, please fill out the form below to get in touch with us.

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