For many Canadians, the biggest single payment they receive all year is their tax refund cheque. How long you'll wait between filing and receiving your refund depends on a number of factors.
1. Paper or Electronic?
According to the Canada Revenue Agency, more than two-thirds of Canadians now file their returns electronically. If you Netfile your return, the average processing time is 10 business days. Paper filers can tack on another four to six weeks to that time.
If you're not signed up for direct deposit and are expecting a paper cheque, add another three to five days to your wait time.
2. Outstanding Balances
Your refund may be delayed if you have an amount owed to a government agency. If you owe money from Employment Insurance benefits, provincial fines or a balance due from a previous year's return, the time it takes CRA to apply part or all of your refund to your outstanding balance can add a few days to your wait time.
3. The Little Details
Refund delays may also be caused by small, often overlooked details. Relocation is a good example. If you've moved since last year's filing and haven't updated your address with CRA, you'll have a hard time filing online. This is because your address on file with CRA and the address on your return must be an exact match. If they don't match, your return will be declined when it's time to submit. Even a small detail such as an incorrect apartment number can lead to delays in your initial filing.
Your CRA My Account holds all the details of your refund. Along with the exact amount you can expect, you can also view the date your return was processed as well as the when your refund will be deposited or mailed out.
CRA My Account is also a terrific tool for viewing your past returns as well as payment dates and amounts for various benefit programs such as the CCTB (soon to be CCB) and GST/HST benefit. You can also update your personal details such as your new address/contact number and your banking info for direct deposit.
If you receive a large refund year after year, you may be shorting yourself a few dollars by allowing CRA to hold your funds until tax time. With the exception of a few refundable credits, your tax refund is exactly that -- a refund of money you've overpaid throughout the year, usually via payroll deductions.
If your payroll deductions better reflected your tax credit situation, you'd receive a higher take-home pay throughout the year. If you banked the difference weekly (instead of CRA "banking" it for you), you would then earn interest on those funds. To change the amount of tax withheld, give your employer a completed form TD1 listing your personal credits.
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