What Happens If You Don't File Taxes in Canada? Penalties and Catching Up

Every year, hundreds of thousands of Canadians miss the tax filing deadline or skip filing altogether. If you owe tax, the consequences are a late-filing penalty and compound daily interest. Even if you owe nothing, not filing cuts you off from benefits and credits that require a filed return. It is never too late in the sense of losing the right to file: returns from 10 years ago can still be filed. This page covers what happens at each stage and how to catch up; it is part of the Dealing with the CRA directory.

The deadline

The filing deadline for most individuals is April 30, and for self-employed people and their spouses June 15, though any balance owing is still due April 30. The full list of dates is on the Canadian tax deadline page, and the quarterly dates for people who pay tax in instalments are on the tax instalments page.

If you miss it:

• If you owe taxes: the late-filing penalty applies, plus compound daily interest on the balance owing
• If you have a refund or zero balance: there is no penalty; you receive your refund later, and benefits that depend on the return stop until you file

Late-filing penalty structure

The penalty only applies when you owe tax. If the CRA owes you a refund, there is no penalty for filing late (though you miss out on benefits until you file).

First-time late filing

Repeat late filing

The higher rate applies if you were charged a late-filing penalty in any of the 3 preceding years and the CRA sent you a demand to file for the current year.

Worked example: $8,000 balance owing, filed 7 months late (first offence)

Worked example: same $8,000, repeat offender, filed 10 months late

The repeat penalty is nearly triple the first-time penalty. Filing on time stops the late-filing penalty from accumulating even when the balance can’t be paid.

Interest on the unpaid balance

The CRA charges compound daily interest on unpaid balances from May 1, at the prescribed overdue-tax rate: 7% annually as of Q4 2026. How the rate is set each quarter is on the CRA prescribed interest rate page. Interest and the penalty are separate charges: not being able to pay adds interest only, while not filing adds the penalty on top.

If you can file but can’t pay, the CRA can set up a payment arrangement for the balance; how to arrange one is covered in CRA payment arrangements when you can’t pay.

Benefits you lose by not filing

Even if you owe nothing, not filing your return blocks access to income-tested benefits.

For many low-income Canadians, the benefits lost by not filing far exceed any tax they would owe. Filing a zero-income return costs nothing and restarts those payments. Lenders also typically ask for two years of Notices of Assessment, so unfiled returns can hold up a mortgage or loan application.

CRA demand to file

If the CRA believes you should have filed a return, it can issue a formal demand to file. This typically happens because:

• The CRA received T4 or T5 slips showing you had income
• You received a large payment (property sale, pension withdrawal)
• You were previously a filer and stopped
• You have a registered business or GST/HST account

Ignoring a demand to file carries its own penalty: $250 for each failure to comply with a demand, per Section 162(7) of the Income Tax Act. This is separate from and in addition to the late-filing penalty.

If you repeatedly ignore demands to file, the CRA can:

• Assess your return without your input (arbitrary assessment), estimating your income based on available data, often higher than your actual income
• Refer the file for criminal charges (fine of $1,000-$25,000 and/or up to 12 months imprisonment)

Criminal charges are reserved for deliberate, persistent non-compliance; ordinary late filers face monetary penalties. Filing late is not in itself an audit trigger either; what does raise the odds of a review is covered in CRA audit triggers.

How far back can the CRA go?

If you never filed a return, there is no statute of limitations: the CRA can assess that year at any time, even decades later. Why a filed return gets reassessed is covered in why the CRA reassessed your taxes.

How to file late returns and catch up

Step 1: Gather your documents

Most T-slips are available in CRA My Account going back several years, under Tax information slips. The CRA also has records of slips filed by third parties, even if you lost your copies. Where each item sits in the account is shown in the My Account guide, and what each slip reports in the guide to tax slips.

Step 2: File one year at a time, oldest first

Each tax return builds on the prior year’s assessment. Filing the oldest year first means carry-forward amounts (non-capital losses, unused tuition credits, RRSP room) are calculated correctly.

Step 3: Software or paper

Current tax software (Wealthsimple Tax, TurboTax, StudioTax) can prepare returns for prior years, and Auto-fill my return can import prior-year slips into NETFILE software if you have My Account access. Paper filing is also accepted: download the return package for the specific tax year from the CRA website. How the two filing methods compare is covered in NETFILE vs paper filing.

Step 4: Pay what you can

If you owe tax, any amount paid with the return reduces the balance interest is charged on. The ways to pay the CRA are covered separately.

Step 5: Taxpayer relief, if circumstances prevented filing

If extraordinary circumstances (illness, disaster, family emergency) prevented you from filing, Form RC4288 asks the CRA to cancel penalties and interest; the CRA can do so for up to 10 prior calendar years. The request is covered in the taxpayer relief guide.

Special situations

You are owed a refund for all years

If the CRA owes you refunds for every unfiled year (common for low-income filers), there is no penalty or interest. Filing the missing returns claims the refunds and restores benefits, and you have 10 years to claim each refund.

You filed in some years but not others

File the missing years individually. The CRA assesses each year independently, and benefits are restored once all required returns are filed.

Unreported income as well as unfiled returns

If the missing years also hide unreported income, the Voluntary Disclosures Program (VDP) can reduce penalties and some interest for people who come forward. When an application counts as unprompted or prompted is covered in the CRA voluntary disclosure guide.

You left Canada and did not file

If you were a Canadian tax resident (even part-year), you must file for the period of residency. If you moved abroad and became a non-resident, a departure return covers the year you left and reports your worldwide income up to the departure date; the leaving Canada tax checklist covers the rest.

Someone passed away and had unfiled returns

The executor or estate representative must file all outstanding returns for the deceased. The final return covers January 1 to the date of death, and penalties apply to the estate if returns are filed late. The guide to filing for someone who died has the details.

Where to start, by situation

Related CRA guides

• What happens if you don’t pay the CRA: collections once a balance is assessed
• Checking whether your return was accepted: once the late return is in