Are you still waiting on your personal income tax refund after filing your tax return? If you’re like many Canadians still waiting for their income tax refunds to hit, you’re probably wondering how much longer it will take.
In 2022, the CRA processed over 31 million returns filed and issued $37 billion in tax refunds.
Below, I’ll explain when you can expect your refund on your tax return from the CRA, what to do if you haven’t received your refund, and explain why you may not have received an income tax refund.
When Are Tax Refunds Issued By The Canada Revenue Agency (CRA)?
The Canada Revenue Agency (CRA) has become quite efficient, and processing times are fairly quick once the CRA receives your return. So exactly how long does it take to get a tax refund in Canada?
In most cases, you can expect to receive your refund within two weeks (or 10 business days) after you submit your return.
Of course, this assumes that you e-file your return. The process can take longer if you file your return by mailing it to the CRA.
Filing Your Income Tax Return Electronically
If you want to get your refund faster, then it’s best to file your tax returns through an online service. As long as you have a bank account that’s registered with the CRA (through your CRA My Account), then you should get your refund via direct deposit shortly after filing.
- In most cases, taxpayers receive direct deposits within two weeks after submitting their returns.
Filing taxes online is quick and easy, and there are a number of free-to-use software programs that are approved by the CRA and help you find tax credits and deductions, submit documents, and allow you to quickly file online.
Once you finish filing online, the tax-filing software should be able to add up your total credits and give you an estimate of what you should receive as your refund.
Filing With A Paper Return
For the past few years, the CRA has encouraged taxpayers to file their tax returns electronically, and in 2022, over 92% of all tax returns were filed electronically. That being said, filing the old-fashioned way almost always incurs a longer wait time.
- When you file through the mail, payments can take up to eight weeks to be issued.
Once you complete your return and mail it to the appropriate address, the CRA typically takes a few weeks to process it before issuing your applicable refund.
Tips To Speed Up Your Tax Refund
Want to get your refund quicker? Here are a few simple tips to follow to help speed up the process.
1. Register For a CRA My Account
Registering for a CRA My Account is a great way to check on the status of your refund and any other government benefits and tax credits you may be eligible for.
Additionally, it can also speed up your refund process. With a My Account, you can check and correct any errors that may be present regarding your contact information as well as your bank’s direct deposit details.
Signing up for direct deposit through your CRA My Account is far quicker than waiting for a mailed cheque. If you need to change the bank account where you receive payments and refunds, this can also be done through your My Account portal.
2. File Your Return Early
The tax deadline in Canada is April 30th. However, I don’t recommend waiting until the last week of the month to file your taxes. The quicker you file your income tax return, the quicker you’ll be able to receive your refund.
As long as you have your income slips, you should be able to file your taxes as early as January, meaning you could have your refund as soon as February.
3. Double-Check Your Taxes For Errors
One of the most common reasons why tax refunds get delayed is due to incorrect or missing information. If the CRA notices any errors or inconsistencies on your income tax return, then your return may not be accepted.
In this case, you’ll have to go back and fix the error or provide supporting documents/evidence for the inconsistency. Either way, this process can take several weeks or longer to resolve, significantly delaying your refund.
4. File With A Professional Tax Return Service
One of the best ways to prevent errors and mistakes is to file your tax returns with a professional tax preparer or CPA.
The tax preparer will double-check and verify all of your information before submitting your return, limiting mistakes. They may also be able to catch and fix mistakes before the return is submitted, which can help you avoid re-filing.
How To Check On The Status Of Your Return
If you’re still waiting on your refund and you’re unsure of how much longer it will take, then you should be able to easily check the status of your return by logging into your CRA My Account portal.
Under account service, you’ll be able to view your tax return status to see if the CRA has processed it yet. If the return has been processed and everything is in order, then a refund should be on its way to you.
If you requested a mailed cheque (instead of a direct deposit), look under the ‘uncashed cheques‘ tab to see if there’s a cheque that’s been sent out by the CRA.
What Happens If I File My Taxes Late?
The deadline to file personal income tax returns in Canada is April 30th, 2023. If you miss this date, the CRA imposes a 5% fee on any taxes you owe and an additional 1% fee for every month past the due date you file.
That being said, filing on time before the deadline is in your best interest.
What Happens If The CRA Issues My Refund Late?
This is fairly uncommon, but it can happen periodically.
Just as the CRA imposes harsh late payment penalties, they can also be generous when a mistake is made on their end.
If you overpaid taxes or the CRA was late in issuing your refund, the CRA will pay you compound daily interest beginning on the latest of the following three dates:
- May 30th, 2023
- The day after you overpaid taxes
- The 30th day after filing your return
What Is The Average Income Tax Refund In Canada?
Curious about how your refund stacks up to other taxpayers? In 2022, around 5.3 million Canadians paid no taxes and received no refund.
However, 17 million Canadians did receive a refund. The average income tax refund amount issued by the CRA in 2022 was $2,093. The remaining population came out of the year with a balance owed to the CRA for income taxes.
Didn’t Receive Your Refund? Here’s Why
If you filed online more than three weeks ago and still have yet to receive your payment, then there may have been an issue processing your refund. Here are some of the most probable causes.
You Owe Taxes
If you have a balance owing to the CRA for the previous year (or multiple years), the refund you would have received will be applied to the balance you owed from the last tax year.
Outstanding Government Debts
If you have other outstanding government debts, such as Employment Insurance (EI) overpayments, unpaid student loans, training allowance loans, or other federal/provincial debts, the CRA may place a garnishment order on your refund.
This is legal under the Family Orders and Agreements Enforcement Assistance Act.
You Haven’t Updated Your Contact Information
Another reason why you may not have received your tax refund is that the CRA has the wrong information for you. For example, your mailing address or the direct deposit details of your financial institution may be incorrect.
If you suspect this is the case, I recommend double-checking your contact information through your CRA My Account. If this is the issue, you can request a duplicate payment from the CRA to be issued using your updated information.
What Should You Do If Your Refund Is Larger Than You Expect?
If your tax refund is significantly larger than expected, your first thought may be, “Lucky me!“
Before you spend it or deposit it, though, you should make sure that you’re actually entitled to the amount.
Periodically, the CRA makes errors and overpays tax refunds. Once the error is discovered, the CRA may contact you to “claw back” the amount or may deduct the amount from future tax refunds.
Alternatively, you may have received a larger tax refund due to a mistake on your part. It’s possible that the CRA simply overlooked it and issued you an incorrect refund. This doesn’t mean that you’re in the clear, though.
If the error is discovered in the future, the CRA will request the amount back. If the CRA believes you blatantly lied on your tax returns to get a larger refund, you may be subject to harsh penalties and even jail time.
FAQs On Tax Filing And Refunds In Canada
To wrap up, here are a few quick answers to some of the most commonly asked questions on tax filling and tax refunds in Canada.
How Do I Check The Status Of My Tax Refund In Canada?
The easiest way to check on your refund status is to log into your CRA My Account. On the dashboard, you’ll be able to see important details about your tax return, such as:
- Whether the CRA received it
- If it was accepted, rejected, or needs to be fixed
- The amount of your refund
- When your refund was disbursed
Can My Tax Refund Become Stale-Dated?
If you recently changed your primary bank account and failed to update your routing and account number on your CRA My Account, then your refund may be sent to the wrong bank account and rejected. This can significantly delay your refund.
That being said, your tax refund cannot become stale-dated. Even if you catch the error late, you can still log into your My Account, update your information and receive the refund you’re entitled to.
Can I Receive A Tax Refund If I Owe The CRA?
If you owe the CRA taxes from a previous tax year or were overpaid for certain benefits, then you may not receive a tax refund. If the amount you owe the CRA is small, then the debt will be paid off, and the remaining portion of your return will be issued to you.
As long as you filed your income tax return correctly before the tax deadline, then the CRA should process it and issue your refund within two weeks if you file electronically and eight weeks if you file by mail.
Did you know that you can now file your taxes through Wealthsimple? In addition to their money management and investment platforms, the company now offers free online tax filing through Wealthsimple Tax.
Keep reading to see my full review of Wealthsimple Tax and how it stacks up to similar programs!