# Paying income tax by instalments - forgot a payment



## yyzvoyageur (Apr 10, 2009)

I've taken over some financial responsibilities for a family member. She's retired and receives CPP, OAS and her RRIF payments each month. Her income taxes have been paid by instalments. Going through her income tax papers, I see that she should have made an instalment payment on the 15th of June, but this was not done, and I don't know how much the payment should have been. I found an instalment payment summary from 2010 that lists four instalments, all of varying amounts.

Two questions:

1. How would I find out how much her instalments should be for 2011? Is there a way to calculate this myself or do we have to contact CRA? Would the payment amounts be listed on her CRA My Account if we set one up?

2. Since we missed the June payment, what has to be done other than paying the missed instalment ASAP? Is there a penalty?

Cheers!


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## FrugalTrader (Oct 13, 2008)

I believe that there is interest charged for missed installment payments. However, you can offset that by paying the next installment payment early, thus offsetting the interest owed (afaik). In other words, you are about 3 weeks late on your June 15 payment, pay your Sept 15 payment 3 weeks early.

Here is more info: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html

Any tax pro members care to comment?


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## kcowan (Jul 1, 2010)

yyzvoyageur said:


> ...2. Since we missed the June payment, what has to be done other than paying the missed instalment ASAP? Is there a penalty?
> 
> Cheers!


I would make a payment equal to the March 15th payment. They will decide if any penalty/interest is due. After your assessment for 2010, they will issue guidance for the Sept/Dec payments.


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## andrewf (Mar 1, 2010)

As I recall, the penalty interest rate is fairly low at the moment, if that makes you feel better. Just make the payment and take your lumps.

FT, I think the government changed their policy for credits/overpayments in that they do not pay the same rate for credit balances as they charge for debit balances. Corporations were using this as a place to park cash as the government was paying higher rates than money market funds, so they felt the need to close this 'loophole'.


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## Cal (Jun 17, 2009)

kcowan said:


> I would make a payment equal to the March 15th payment. They will decide if any penalty/interest is due. After your assessment for 2010, they will issue guidance for the Sept/Dec payments.


That is what I would do too.

I set up my payments automatically online through my bank, every year when my tax return is done. Then you won't miss any payments.


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## Four Pillars (Apr 5, 2009)

Sh*t - I forgot to make the June payment as well. 

Thanks for the reminder!


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## OhGreatGuru (May 24, 2009)

yyzvoyageur said:


> I've taken over some financial responsibilities for a family member. She's retired and receives CPP, OAS and her RRIF payments each month. Her income taxes have been paid by instalments. Going through her income tax papers, I see that she should have made an instalment payment on the 15th of June, but this was not done, and I don't know how much the payment should have been. I found an instalment payment summary from 2010 that lists four instalments, all of varying amounts.
> ...


I believe the payments for Mar. 15 and June 15 are normally the same. Then you get a revised notice in August for the next series of payments, after they have assessed the 2010 tax returns. Why don't you just mail it in and blame the delay on the postal strike? I don't know why she would have 4 varying amounts in one year unless she initiated some change in the instalments (eg. a significant change in income from the preceding year; or a change in tax deducted at source on some of her income) 

For future use, your family member should file Form T1013 - Authorising or Cancelling a Representative - (See IT 1013) authorizing you to deal with CRA on her behalf. Then you might be able to get answers to such questions from them by phone. They may not deal with you unless your relative calls them.

For future, mail post-dated cheques or set up automatic payments as soon as the notice for the schedule of payments comes in.


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## yyzvoyageur (Apr 10, 2009)

Great advice, all. Thank you!


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