How Long Does Tax Return Take: Canada

In this article, we’ll take a detailed look at how long a tax return takes to be processed. We’ll also look at the Canada Revenue Agency (CRA) filing deadlines, what to do if you’re facing delays, and when you can expect tax refunds to be issued.

In short, tax returns typically take two weeks to process if filed online, and eight weeks if filed by mail. Delays can occur if the CRA requests additional documents or if you file during peak tax season. Tax refunds usually arrive within five business days by direct deposit or several weeks by cheque after your return is processed.

How Long Does It Take to Receive Your Tax Return?

The time it takes to receive your tax return will depend on how you file it:

• Electronic filing (NETFILE): If you submit your tax return online using NETFILE, you can usually expect a processing time of around 2 weeks.
• Paper filing: If you choose to submit your return by paper, the process will usually take much longer – typically around 8 weeks or more.

What Can Affect Processing Times?

There’s no one reason processes times vary. Instead, it can be a series of factors that add days or weeks:

• Filing early vs late: Filing early in the season gets you processed faster, filing close to April 30 or during peak season can cause delays.
• Incomplete or incorrect returns: Errors or missing info can cause the CRA to ask for more info and extend the processing time.
• CRA review or audit: Sometimes the CRA needs to review or audit your return which can also cause delays.

Tax Return Filing Deadlines in Canada

For most Canadians the deadline to file your personal tax return is April 30. If that date falls on a weekend or public holiday the deadline will become the next business day. It’s important to file on time even if you can’t pay your balance right away to avoid late penalties.

For self employed people, the deadline to file is June 15. However, you still have to pay your taxes by April 30. If you delay your payment past that date you’ll start accruing interest on the outstanding amount even if you’ve filed your return before the June deadline.

The CRA charges a late filing penalty of 5% of the balance owing plus 1% for each month the return is late to a maximum of 12 months. This penalty increases if you’ve been late before and interest accrues daily on any outstanding amounts. This not only adds to your tax bill but slows down the processing of your return.

Filing Methods: Electronic vs. Paper Filing

Filing your tax return electronically through NETFILE has a few stand-out advantages. The biggest one is faster processing times – with most electronic returns processed within 2 weeks. Plus, NETFILE gives you instant confirmation that your return has been received – which helps reduce the uncertainty around your return. The system will flags common errors too – which can speed up the process and make sure everything’s as accurate as possible.

If you choose to file your taxable income returns by paper it can take up to 8 weeks or more. While paper returns take longer, some people still prefer paper filing – whether that’s due to limited internet access, a preference for physical documentation, or just the habit of mailing their returns. While it is slower – it’s still an option for those who can’t or won’t file electronically.

How to Track the Status of Your Tax Return

If you’re eager to find out when your return has been processed and a refund prepared, the CRA offers different ways to track the status of your return – either online or over the phone.

Checking Using CRA’s “My Account”

The most convenient way to track your tax return is through CRA’s “My Account” portal. This secure online platform lets you monitor your return from the moment it’s submitted. The system is easy to use too:

1. Log in to “My Account” via the CRA website. If you don’t have an account yet, you’ll need to register, which involves verifying your identity through personal information and a security code mailed to you.
2. Once logged in, select “View the status of your return” from the homepage.
3. You’ll see updates on your return’s progress, from when it’s received to when it’s processed.

Checking Your Return Status by Phone

If you prefer not to use the online system, you can also track your tax return by phone. The CRA offers an automated Tax Information Phone Service (TIPS) available 24/7. Again, the system is easy to use:

1. Call the CRA at 1-800-959-1956.
2. Select the option for checking your return status.
3. You’ll be asked for your social insurance number, date of birth, and specific line amounts from your last tax return to verify your identity.

What Do the Different Return Statuses Mean?

As your return moves through the CRA system, you’ll likely see a few different statuses. Here’s what they mean:

• Received: The CRA has received your tax return but hasn’t started processing it yet. At this stage, no further action is required from you.
• In Progress: Your return is being reviewed and processed. This step usually takes the longest, as it includes verifying all the details in your return.
• Completed: The processing is done. You’ll either see your refund amount or be informed if you owe additional taxes.

Keeping an eye on your return’s status helps ensure there are no unexpected delays or issues. Whether you prefer to use the CRA’s online tools or the phone service, it’s useful to always know where your return stands.

What to Do if Your Tax Return is Delayed

If your tax return is delayed, there are several common reasons.

Errors in your return, such as typos or miscalculations, can lead to extra processing time as the CRA verifies your information. The CRA may also request additional documents to support claims like deductions or credits, which can cause delays. Audits or reviews, which are routine but more detailed, will potentially also extend the process. What’s more – filing during peak season can lead to slower processing due to high volume – and these issues can compound to make your return take much longer.

If your return is delayed beyond the usual time frame (two weeks for online, eight weeks for paper), you can check the status through the CRA’s “My Account” portal. If there are no online updates, it’s often a good idea to contact the CRA directlyby phone – making sure you have your social insurance number and recent tax information ready when calling.

What are Tax Refunds and Why Might You Get One?

Put simply, a tax refund occurs when you’ve paid more income tax than you owe. There are lots of different situations that can lead to you needing a tax refund, including:

• If your employer deducts too much tax through payroll, you’ll get a refund for the difference. This happens when you complete the TD1 form upon starting a job, which determines how much tax is withheld.
• Contributing to a Registered Retirement Savings Plan (RRSP) lowers your taxable income. If your employer deducts taxes based on your full income, an RRSP contribution could result in a refund.
• Self-employed individuals who overpay their quarterly tax installments may also be eligible for a refund.
• Deductions like childcare expenses or refundable tax credit, such as the GST/HST credit, can reduce your tax owed and increase your refund. Keep in mind that refundable tax credits can result in a refund, while non-refundable tax credits only reduce your tax liability to zero.

Getting Your Refund

When it comes to getting your refund you have two choices: direct deposit or a cheque.

Direct deposit is the faster and easier option as the refund goes straight into your bank account – usually within 5 business days after your return is processed.

Cheque tends to be the slower option as it has to be printed and mailed. Depending on postal times it could take several weeks to get a cheque.

How long does it take to get the average tax refund depends on how you filed your income tax return. If you filed online and chose direct deposit you could get your refund in 2 weeks. Filing by mail or choosing a cheque could take 8 weeks or more.

Reasons You Might Not Recieve a Refund

According to official information relating to the Canada Revenue Agency found on the Government of Canada website, there are a series of reasons that may prevent you receiving your refund. These will not apply to everyone – and errors may occur – but it’s useful to check against this list if you’re still waiting for your refund and don’t know why:

• an amount owing (or pending amount owing) for federal tax, state tax, child support, etc.
• a garnishment order under the Family Orders and Agreements Enforcement Assistance Act
• certain other outstanding federal, provincial or territorial government debts, such as student loans, employment insurance (EI) and social assistance benefit overpayments, immigration loans or training allowance overpayments
• any outstanding GST/HST returns from a sole proprietorship or partnership
• a refund of $2 or less

What Happens After Your Tax Return is Processed?

Once your tax return is processed by the CRA, there are a few key steps that follow. Understanding what happens next will help you stay informed about your tax obligations and how to handle any potential issues.

Notice of Assessment (NOA)

After your return is processed, the CRA issues a Notice of Assessment (NOA). This document confirms the details of your return, such as your income, deductions, and whether you owe additional taxes or will receive a refund. It also outlines any changes made by the CRA during processing, including corrections or adjustments.

The NOA is crucial because it provides a summary of your tax situation for the year and is needed for future filings or financial applications – like applying for loans or finance.

What to Do if You Disagree with Your Assessment

If you believe there’s an error in your Notice of Assessment, you can dispute the CRA’s findings.

First, you’ll need to review the details carefully to understand where the discrepancy lies. If you still disagree, you have the right to file a formal objection – which can be done through the CRA’s online services or by submitting a paper form.

You’ll need to provide supporting documentation to back up your claims. The CRA will review your case, and if necessary, adjust your assessment. It’s important to remember that there are strict deadlines for filing objections, so it’s important to act promptly.

Key Takeaways

• Processing Times: Tax returns in Canada are typically processed within two weeks if filed online and eight weeks if filed by mail.
• Refund Timelines: Direct deposit refunds usually arrive within five business days after processing, while mailed cheques can take several weeks.
• Common Delays: Errors in your return, additional document requests, or audits can cause delays in processing and refunds.
• Reasons You May Not Get a Refund: Refunds may be withheld due to debts like unpaid taxes, child support, student loans, or a refund amount of $2 or less.
• Tracking Your Return: Use CRA’s “My Account” portal or phone service to track the status of your return and stay informed throughout the process.