Missing the tax filing deadline can cause more problems than most people expect. Many Canadians think filing late is no big deal—until CRA starts charging penalties, adding interest, or holding back benefits like CCB, GST credit, or Old Age Security.

This guide explains exactly what happens when you file late and what steps you can take to fix it.

1. You May Face a Late-Filing Penalty

If you owe taxes and file after the deadline, CRA charges a late-filing penalty:

• 5% of the balance owing

• PLUS 1% for each month you file late, up to 12 months

Example:
If you owe $2,000 and file 5 months late:

• Penalty: 5% = $100

• Monthly penalty: 1% × 5 months = $100

• Total penalty = $200

The penalty is only applied when you owe money.
If you do not owe anything, you won’t get charged—but other consequences may apply.

2. Interest Starts Adding Up Daily

Interest is charged on:

• Your unpaid taxes

• Your late-filing penalties

CRA interest compounds daily, meaning your balance grows faster the longer you wait.

3. CRA May Hold Back Your Benefits

If you don’t file on time, CRA may pause or stop your payments:

• Canada Child Benefit (CCB)

• GST/HST credit

• Climate Action Incentive

• Ontario Trillium Benefit (OTB)

• Disability Benefit top-ups

CRA requires your tax return every year to calculate your eligibility.

No tax return = no monthly benefits.

This affects thousands of families each year—especially those relying on CCB.

4. CRA Can Deny Certain Credits

If you don’t file by the deadline, CRA may deny or delay credits such as:

• Tuition credits

• Medical expenses

• Moving expenses

• Employment expenses

• Caregiver credits

• RRSP contributions

• CWB (Canada Workers Benefit)

Late filing makes it harder to claim everything correctly.

5. If You Are Self-Employed, Interest Still Applies

Self-employed individuals get more time to file, but not more time to pay.

Even if your filing deadline is June 15:

• Taxes are still due by April 30

• Any unpaid balance starts growing interest on May 1

6. CRA Can Start Collection Actions

If you owe money and don’t file:

• CRA can freeze your bank account

• Garnish income

• Take refunds from future years

• Place liens on assets

This usually happens when someone ignores CRA for a long period.

7. You May Lose Access to Refunds or Benefits

If CRA thinks you’re avoiding filing, they may:

• Estimate your taxes

• File a return on your behalf

• Withhold refunds

• Cut off benefits

CRA’s estimated returns often overstate your income, which reduces benefits.

8. Older Unfiled Returns Can Trigger Audits

Multiple years of unfiled taxes can raise red flags, leading CRA to:

• Request documents

• Ask for bank statements

• Review your income

• Audit your credits

It’s better to file late than not file at all.

How to Fix Late or Missed Tax Returns

1. File as soon as possible

Filing quickly reduces penalties and prevents further interest.

2. File even if you owe money

Filing late is better than not filing.

3. File even if you can’t pay

You can set up a payment plan with CRA after filing.

4. Get help if you’re behind

TikiTax can help catch up on:

• 1 year late

• 3–5 years late

• 10+ years late

• Returns for newcomers

• Returns for self-employed workers

• Returns for people who lost slips or documents

5. Request penalty relief if you qualify

CRA sometimes removes penalties for:

• Illness

• Hardship

• Natural disasters

• CRA processing delays

• Severe financial difficulty

A professional can prepare the request for you.

Final Takeaway

Filing taxes late can lead to:

• Penalties

• Interest

• Lost benefits

• Delayed refunds

• CRA collections

• Reduced CCB or GST credit

But the good news is:
You can always file late tax returns and get back on track.

TikiTax helps Canadians file on time, fix late filings, and restore benefits quickly and stress-free.