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Paper returns go to the CRA tax centre that serves your province or territory of residence, not to one national address. The correct address is printed in the paper return package and listed on canada.ca under mailing addresses for individual returns, and it differs for non-residents and for business returns. Filing electronically is much faster: for the 2025 tax year the CRA aims to issue a refund on an online return in about two weeks, against a considerably longer standard on paper.

As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.

For the 2026 tax year, federal rates are 14% on the first $58,523 of taxable income, 20.5% from there to $117,045, 26% to $181,440, 29% to $258,482, and 33% above that. Each rate applies only to the income inside its own band, so moving into a higher bracket does not raise the tax on the income below it. Provincial or territorial tax is added on top.

Yes, the CRA does telephone people, usually about a balance owing, a missing return, an audit or to verify information, and calls can come from many different numbers, so caller ID proves nothing either way. A real agent never demands payment by gift card, cryptocurrency or e-transfer, never threatens immediate arrest or deportation, and never asks for a password. If a call feels wrong, hang up, check your balance and mail in My Account, then call back using a number from canada.ca.

Sign in to CRA My Account and open the tax returns section, which lists your assessed returns, notices of assessment and reassessment, and carry-forward amounts for earlier years. You can also download a proof of income statement, request a copy by phone, or ask whoever prepared the return for you. Keep your own copy and the supporting records for six years from the end of the tax year they relate to.

EI benefits are taxable income. Service Canada withholds income tax before each payment reaches you, and the total benefits plus the tax withheld appear on your T4E for the year. That withholding follows a basic calculation rather than your full marginal rate, so people who also worked during the year often end up with a balance owing at filing. Asking Service Canada to withhold more, or setting money aside yourself, avoids a surprise. Higher-income claimants can also have to repay part of their regular benefits through the return.

Yes. Licensed daycare, nursery school, day camp and after-school care generally qualify as child care expenses, deducted from income rather than claimed as a credit. The lower-income spouse normally has to make the claim, and the deduction is capped by the child's age and by that spouse's earned income. You need receipts showing the provider's name and, for an individual caregiver, their social insurance number. The CRA's child care expenses page carries the current limits.

Coffee bought ready to drink from a cafe or restaurant is taxable at the GST/HST rate where you buy it, so 5% GST alone in Alberta, 13% HST in Ontario, 14% in Nova Scotia since 1 April 2025. Coffee beans, ground coffee and instant coffee sold in a grocery store are basic groceries and are zero-rated, so no GST/HST applies. Provincial sales tax follows its own food rules.

No. In Canada severance, pay in lieu of notice and a retiring allowance are fully taxable in the year you receive them. There is no tax-free slice of a redundancy payment the way some other countries allow, and tax is withheld before payment. A direct transfer to an RRSP is available only for older years of service under a narrow rule, so your ordinary RRSP room is usually the only shelter. Have settlement wording reviewed before you sign.

No. The Canada Child Benefit is tax free and is not reported as income on your return, so it does not raise the tax you owe or cut your other credits. Provincial child benefits paid in the same deposit are also tax free. The benefit is still income tested, which is why both spouses must file every year: entitlement for the July to June benefit year comes from the previous year family net income.

Deductions reduce taxable income, and the largest for most people is an RRSP contribution: the room is 18% of prior-year earned income up to $33,810 for 2026 and $32,490 for 2025, less any pension adjustment, plus unused room carried forward. Other options include claiming the employment or self-employment expenses you are entitled to, carrying charges on investment loans, childcare and eligible moving costs, splitting eligible pension income with a spouse, and realising capital losses to offset gains.

A stipend is taxable unless a specific exemption applies, and what matters is the nature of the payment. Pay for work such as a research or teaching assistantship is employment income. A research grant is reported as income with eligible research expenses deducted against it. An award for study can qualify for the scholarship exemption if you are enrolled in a qualifying programme. The payer issues an information slip, and the box used signals the treatment.