I Forgot to Report Interest Income on My Tax Return: What to Do in Canada

Interest income is one of the most commonly overlooked items on a Canadian tax return, particularly for people with multiple accounts, new HISAs, or compound GICs. The problem is that CRA gets T5 slip data directly from your bank, so any missing interest income is easy for them to catch. This page covers the interest-specific fix: which line, which slips, and how GIC accrual works. It is part of our guide to filing your tax return.

Why CRA Already Has This Information

Every bank, credit union, and financial institution that pays you $50 or more in interest per year must issue a T5 slip (Statement of Investment Income) and file a copy with CRA by the end of February. CRA’s systems cross-reference this data against your filed return.

If you earned less than $50 in interest from a given institution, they may not issue a T5, but you are still required to report that income. Many Canadians miss small interest amounts because they never received a slip.

What Counts as Interest Income (Line 12100)?

Interest isn’t the only investment income CRA cross-matches. Dividends and capital gains go on different lines, and mixing them up is another common mistake. If a whole T4 is missing too, see what to do when you forgot a T4 slip.

The T5 slip covers interest and dividends; the T3 slip covers income from trusts, mutual funds, and ETFs, and T5008 slips report proceeds from investment dispositions (capital gains).

GICs and Accrued Interest

For compound (non-cashable) GICs with a term longer than one year, CRA requires you to report accrued interest on each anniversary date, even before you receive the cash. This catches many people off guard when a 5-year GIC matures.

For example, if you hold a $50,000 compound GIC at 4%, you must report approximately $2,000 in interest income each year of the GIC’s term, not all $10,800+ when it matures.

What Happens If CRA Finds It Before You Fix It

CRA will issue a Notice of Reassessment that:

1. Adds the missing interest income to line 12100
2. Recalculates your tax owing at your marginal rate for that year
3. Adds arrears interest from April 30 of the filing year at CRA’s prescribed rate (currently 7% annually, compounded daily)
4. Adjusts any income-tested benefits (the Canada Child Benefit, GIS, GST credit) that were calculated based on the understated income

Honest errors that you proactively correct are generally treated as errors, not evasion: you’ll owe the arrears interest above but no penalty. The civil gross-negligence penalty (50% of the understated tax) generally applies only when there’s a pattern of wilful omission or the amounts are very large, and it’s far more likely to be assessed if CRA catches the omission first rather than you disclosing it via a T1 Adjustment.

How to Fix It

Step 1: Find all missing T5 slips

Log in to CRA My Account → Tax information → Tax slips. CRA posts T5 data from all institutions that filed slips in your name. You can also check your online banking portals: most financial institutions provide tax documents under “Documents” or “Tax Centre.”

Step 2: Correct line 12100

For each year with missing interest, line 12100 needs the corrected total: slip interest, interest with no slip, and accrued GIC interest. Attach the T5s to a paper request. Whichever way you send the change (My Account, software or Form T1-ADJ, all explained on the guide to fixing a filed return), the CRA accepts adjustments up to 10 tax years back.

Step 3: Pay any balance

Arrears interest keeps compounding daily on the extra tax until the balance on the reassessment is paid. Payment options:

• CRA My Account, Make a payment
• Online banking, with the CRA added as a payee
• Canada Post outlet with a remittance voucher

Multiple Years of Unreported Interest

If you have several years of unreported interest income, the Voluntary Disclosures Program lets you come forward proactively and may result in partial interest relief and waiver of gross negligence penalties. A tax accountant can help assess whether it fits your situation.

How to Avoid Missing Interest Income in Future Years

• Download your T5s early: most banks post them in online banking by mid-February
• Check CRA My Account: all T5s filed on your behalf appear there by April
• Track GIC anniversaries: note when compound GICs accrue reportable interest
• Consolidate accounts: fewer institutions means fewer slips to track
• Watch joint accounts: each account holder must report their proportional share, and it’s easy to assume the other person is claiming it
• Include foreign accounts: interest from a foreign bank or investment account is still taxable in Canada even when no Canadian slip is issued

Related Reading

• GIC vs HISA: Which Is Better?
• Deductions and Credits Hub