That reduction in tax payable results from the fact that both income tax brackets (on which the tax rate payable is based) and tax credit amounts are both indexed to inflation, and so increase from one year to the next. Where a taxpayer’s income has not changed significantly between 20 and his or her available deductions and credits remain the same, the likelihood is that total tax liability for 2022 will actually be slightly less than it was in 2022.
The taxpayer can pay the amounts specified on the Reminder by the respective due dates between March 15 & June 15:Ī taxpayer who chooses this option can be certain that he or she will not face any interest or penalty charges, even if the amount paid turns out to be less than the taxes actually payable for the 2022 tax year.The taxpayer then has the following three options: Each of those amounts represent the CRA’s best estimate, based on the taxpayer’s return filed for the 2021 taxation year, of one quarter of the net tax will which be payable by the taxpayer for 2022. This year, such instalment payments of tax are due and payable on March 15, June 15, September 17, and December 17.Īn Instalment Reminder issued by the CRA in February 2023 will identify two amounts, one to be paid by March 15 and the other due by June 15.
Essentially, the requirement to pay by instalments will be triggered where the amount of tax withheld from the taxpayer’s income is at least $3,000 less than their total tax liability for the current and either of the two previous years. Canadian federal tax rules provide that a taxpayer may be required to pay income tax by instalments where the amount of tax which was or will be owed on filing is more than $3,000 for the current year (2022) and either of the two previous years (2020 or 2021).
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