Originally published May 28, 2014.
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CRA requires taxpayers to make quarterly tax instalments when there's a large amount owing in previous years.
If your net tax owing for 2013 or 2014 was greater than $3,000 you likely received a letter from CRA stating you must pay your income tax by instalments.
Quarterly Tax Installment Dates
- June 15
- September 15
- December 15
- March 15
If your main source of income is self-employment income from farming or fishing, your instalment dates are December 31 and April 30.
Note: if the deadline is on a Saturday or Sunday, the instalment payment is due the next business day.
Canada Revenue Agency (CRA) will charge you interest and penalties if your payments are not received by the due date or you pay less than the required amount. FBC provides a reminder to our Members to ensure you don't miss a payment.
If your 2015 net tax owing will be less than $3,000 then you don't need to make quarterly payments even if you receive an instalment reminder.
Tax instalment payments are calculated based on:
- Your net tax owing
- Any Canada Pension Plan contributions payable on self-employment and other earnings
- Any voluntary employment insurance premiums payable on self-employment and other eligible earnings
Determining The Amount to Pay for Your Tax Instalment
CRA will send out instalment reminders that suggest an amount to pay, though there are 3 methods you can use to determine your payments:
- No-Calculation Option - this option is best for you if your income, deductions, and credits stay about the same from year to year
- Prior-Year Option - this option is best for you if your 2015 income, deductions, and credits will be similar to your 2014 amounts but significantly different from those in 2013.
- Current-Year Option - this option is best for you if your 2015 income, deductions, and credits will be significantly different from those in 2013 and 2014
Choosing the best tax instalment payment option for your financial situation will help ensure you don’t overpay your tax during the year or have a large amount of tax to pay when you file your income tax and benefit return at tax time next year.
How To Make a Tax Instalment Payment to CRA
You can use My Payment on the CRA website, or make a payment through your financial institution. Be sure your payments are paid on time to avoid the interest and penalties.