Leave a commentThere are a few rules to pay attention to regarding penalties on unpaid taxes as well as late filings. For 2024, if you have a balance owing, the Canada Revenue Agency (CRA) will charge you compound daily interest on any unpaid amounts starting the day after the balance is due. This holds true for reassessments as well.
If you file late for 2024, the penalty is 5% of your 2024 balance owing, plus an additional 1% for each full month that you file after the tax filing due date—to a maximum of 12 months.
Looking further back, if the CRA charged you a late-filing penalty for 2021, 2022, or 2023 and requested a formal demand for a return that they haven’t received, your late-filing penalty for 2024 will be 10% of your balance owing. Then you will be charged an additional 2% for each full month that you file after the due date—to a maximum of 20 months.
Filing and making payments on time can help to keep costs down.