Who has to pay installments?
You have to pay your income tax by installments for the current year if your net tax owing for the current year will be more than $3,000 AND your net tax owing was more than $3,000 in either of the two calendar years before the previous year.
Why do I have to pay installments?
If you receive income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by installments. This can happen if you receive rental, investment, or self employment income, certain pension payments, or income from more than one job.
What are my installment payment options?
You have three installment payment options:
no-calculation option (this option is best for you if your income,
deductions, and credits stay about the same from year to year);
prior-year option (this option is best for you if your current calendar
year income, deductions, and credits will be similar to your prior
calendar year amount but significantly different from those in the
calendar year before that); or
current-year option (this option is best for you if your current calendar
year income, deductions, and credits will be significantly different from
those in prior years).
*If you choose the best installment payment option for your situation, you will not overpay your tax during the year or have a large amount of tax to pay when you file your return. You do not have to tell the CRA which option you choose.
I received an installment letter and/or reminder from the CRA. Do I have to pay the installments that they suggest?
No. Installment reminders sent by the CRA are always based on the no-calculation option. You can pay the installments based on the option you choose as discussed in question 3 above.
When are the installments due?
Your installment payments are due March 15, June 15, September 15 and December 15. When a due date falls on a Saturday, a Sunday, or a holiday recognized by the CRA, they consider your payment to be paid on time if received or if it is postmarked on the next business day. Payments you make in person at your financial institution, or electronically are considered received by the CRA on the date that you make them.
How and where do I make my installment payments?
Each installment reminder package the CRA sends includes two copies of Form INNS3, Installment Remittance Form. If you need more copies, call the CRA at 1-800-959-8281.
To make your payments, you have four options:
- You can now make electronic payment directly to CRA via the option in My Payment
. You may also be able to pay electronically through your financial institution's Internet or telephone banking services.
At your financial institution
- You can make your payment free of charge at your branch of a Canadian chartered bank, caisse populaire, or credit union. You must have Form INNS3 from the CRA in order for the institution to accept the payment. Give Form INNS3 to the teller, who will detach and keep the payment section of the form, and who will stamp and give the rest to you as a receipt.
By pre-authorized debits
- You can have your installment payments debited from your account, however we don't recommend this option as to change the frequency or amounts you need to continually contact the CRA.
- You can send a cheque or money order payable to the Receiver General, and a completed Form INNS3, to Canada Revenue Agency, 875 Heron Road, Ottawa ON K1A 1B1. Note - Please write your social insurance number (SIN) on the back of your cheque or money order to help CRA process your payment correctly.
What if I don't remit the right amount of installments?
The CRA can charge you interest and penalties for failure to make installments.