Chapter 2: Filing Requirements and Deadlines

Question 1

What is ITA 150(1)?

Answer 1

ITA 150(1) requires all taxpayers (individuals, corporations, and trusts) to file an income tax return for the year.

Question 2

What conditions trigger the filing of an income tax return for individuals under ITA 150(1)?

Answer 2

Income tax is payable,

claiming a refund,

directed by CRA to file,

making an RRSP contribution,

disposing of capital property,

realizing a taxable capital gain,

splitting pension income,

contributing to CPP/EI,

or qualifying for government benefits.

Question 3

What are “Nil Returns”?

Answer 3

Nil Returns are income tax returns with no income tax payable but filed to ensure benefits continue, like the Canada Child Benefit.

Question 4

What is the “SimpleFile” service?

Answer 4

Introduced in 2024, “SimpleFile” allows low- or fixed-income individuals to file tax returns with a simple phone call, expanding on the “File My Return” program.

Question 5

What is the difference between NETFILE and EFILE?

Answer 5

NETFILE allows individuals to file personal income tax returns through certified tax software, while EFILE is for tax preparers to file returns for their clients.

Question 6

What is the general rule for filing income tax returns for individuals in Canada?

Answer 6

As per ITA 150(1)(d)(i), individuals must file their income tax return on or before April 30 of the following calendar year unless the due date falls on a weekend, in which case the next business day applies.

Question 7

What happens if April 30 falls on a weekend

Answer 7

The due date extends to the next business day.

Question 8

What is the filing due date for individuals carrying on a business?

Answer 8

The filing due date is extended to June 15 of the following year (ITA 150(1)(d)(ii)).

Question 9

Does the extended filing deadline for individuals who carry on a business apply to spouses?

Answer 9

Yes, it applies to the spouse or common-law partner if they are cohabiting throughout the year and either spouse has business income.

Question 10

When are payments due for individuals carrying on a business?

Answer 10

Even though the filing deadline is extended to June 15, payments for amounts owing must still be made by April 30 to avoid interest (ITA 248(1)).

Question 11

What happens if an individual does not pay the amount owed by April 30?

Answer 11

Interest will be charged on any unpaid balance at the prescribed interest rate until the balance is paid.

Question 12

If Brandon Katarski earns business income as a sole proprietor in 2024, when is his tax return due, and when must payment be made

Answer 12

His tax return is due June 15, 2025, but payment is due by April 30, 2025, to avoid interest on amounts due.

Question 12

If Brandon’s spouse has no income tax liability for 2024, when does her income tax return need to be filed?

Answer 12

Brandon’s spouse still needs to file by April 30, 2025, to maintain benefits like the Canada Child Benefit and the quarterly GST/HST credit.

Question 13

What is ITA 150(1)(b) concerning deceased individuals?

Answer 13

ITA 150(1)(b) states that if an individual dies after October of the year, their final tax return is due six months after the date of death, instead of the regular tax filing deadline.

Question 14

What happens to the tax return filing date if an individual dies between November 1st and April 30th?

Answer 14

If an individual dies between November 1st and April 30th, the final tax return for the previous year must be filed six months after the date of death.

Question 15

How does the tax filing extension apply to individuals carrying on a business who die after December 15?

Answer 15

If an individual carrying on a business or with a cohabiting spouse carrying on a business dies after December 15, the six-month extension does not apply to the tax filing due date of June 15

Question 16

How is the filing date affected for an individual who dies while carrying on a business with a June 15 filing date?

Answer 16

The filing date becomes the later of June 15 or six months from the date of death.

Question 17

If an individual dies while carrying on a business on May 2, 2025, what is the extended filing date for their 2024 income tax return?

Answer 17

The extended filing date would be November 2, 2025, which is six months from the date of death.

Question 18

What happens to the tax return for 2025 if an individual dies partway through 2025?

Answer 18

A separate income tax return must be filed for 2025, as it will be the individual’s final tax return, with the filing extension not applying to the 2025 year.