Paying your Tax by Installments

You may have to pay tax by installments if you earn income for more than one year from which no tax was withheld. You may also have to pay tax by installments if not enough tax was withheld. This can happen if you earn rental, investment, or self-employment income, certain pension payments, or income from more than one job.

Important facts

What are Installments?

• Installments are quarterly income tax payments that some individuals have to pay to the Canada Revenue Agency (CRA) on or before March 15, June 15, September 15, and December 15.
• Installments are made regularly through the calendar year as income is being earned. This is similar to when employees have taxes withheld from their pay.
• You may have to pay interest and possibly penalties if your installment payments are late or less than the required amount.

Who pays income tax by installment?

You have to pay your income tax by installments for 2013 if your net tax owing (the amount you owe on your income tax and benefit return) is more than $3,000*:

• in 2013; and
• in either 2012 or 2011.

*Use a limit of $1,800 instead for any year you lived in Quebec on December 31.

Farmers and fishers – If you meet the above criteria, but your main source of income in 2013 is self-employment income from farming or fishing, you pay only one installment payment by December 31^st.

Making installment payments

• For more information about paying by installment, go to www.cra.gc.ca/instalments or consult Pamphlet P110, Paying your income tax by installments.
• To find out how much you need to pay each quarter, you can view your installment reminders online using the CRA’s online My Account service.
• You can make your payment using your financial ins titution’s online or telephone banking services. For other options, go to www.cra.gc.ca/payments.
• If you are an employee or pensioner, you can reduce the amount of your installment payments, or eliminate them, if you reduce your net tax owing. You can do this by having tax withheld, or by increasing the amount of tax withheld, by your employer or pension administrator. For more information, go to www.cra.gc.ca/deductmore.

Let the CRA remind you by email when your payment is due

To receive an email each quarter reminding you of your payment due date, sign up for the Individuals – Quarterly instalment payment reminder electronic mailing list. Go to www.cra.gc.ca/lists.