Filing your T1 late: what it costs and what to do now
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The self-employed file by June 15, but any balance is still due April 30. The penalty grows each full month the return is late.
Two dates, and the self-employed have both
Most people file their personal return by April 30. If you, or your spouse or common-law partner, carried on a business in the year, the filing date is June 15. Any balance owing is due April 30 either way, so June 15 gives you more time to file and no more time to pay. For someone who carried on a business, the return is late after June 15.
What a late return costs
- Late-filing penalty: 5% of the balance owing, plus 1% of it for each full month the return is late, up to 12 months.
- Repeat late-filing penalty: 10% of the balance owing, plus 2% of it for each full month, up to 20 months. The CRA charges it when it charged a late-filing penalty on one of your previous three returns.
- Interest: charged on the balance from the day after it was due until it is paid, compounded daily, at a rate the CRA sets every three months.
The late-filing penalty applies when there is a balance owing. A fictional example: a balance of CAD 4,000 and a return filed 3 full months late. The penalty is 5%, CAD 200, plus 3% for the 3 months, CAD 120, so CAD 320, before interest. With the repeat penalty it would be 10%, CAD 400, plus 6%, CAD 240, so CAD 640. The figures are invented.
What to do now
- File the return even if you cannot pay the balance. Each further full month adds to the penalty, up to the limit.
- Pay what you can. Interest runs on whatever is still unpaid.
- If you cannot pay in full, contact the CRA about a payment arrangement.
- Gather your records. If the books for the year are not finished, they come first, because the return is built from them.
If you had a reason
The CRA can cancel or waive penalties and interest in some circumstances beyond your control, such as illness, a disaster or financial hardship. You apply on Form RC4288, with supporting documents, and the CRA decides each request.
Is June 15 the deadline to pay?
No. June 15 is the filing date for someone who carried on a business. Any balance owing is due April 30, and interest runs from the day after.
How is the late-filing penalty worked out?
5% of the balance owing, plus 1% of it for each full month the return is late, up to 12 months. A repeat penalty of 10% plus 2% a month, up to 20 months, applies where a late-filing penalty was charged on one of the previous three returns.
What if I cannot pay what I owe?
File anyway, and contact the CRA about a payment arrangement. Filing late adds a penalty that filing on time with an unpaid balance does not.
Can the penalty be cancelled?
In some circumstances beyond your control, yes. You apply on Form RC4288 and the CRA decides.
Years of returns never filed: the Voluntary Disclosures Program →
Books behind? Start with the catch-up checklist →
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