AMT paid in excess of ordinary tax in one year is eligible to be carried forward seven years and deducted against tax payable in excess of the AMT liability in future years. An individual who makes quarterly tax instalments is required to take the minimum tax into account for the purpose of determining instalments payable. The minimum tax is not applicable in the year of death. GIS receipts are included in net income, affecting tax calculations, although an offsetting deduction allows individuals to exclude GIS benefits from taxable income. An additional penalty applies when returns are filed late and taxpayers have already received a late filing penalty during any of the three preceding years.
Interest is charged on unpaid tax and penalties from the due date.
Penalties and interest paid Tip To avoid penalties, file your return on time even if you are unable to pay the tax balance due. are not tax deductible. Interest received from the CCRA is taxable in the year of receipt. If your instalment has been late or deficient in the past, consider prepaying or overpaying future instalments. Alternatively, taxpayers may choose to pay all four instalments on the basis of the preceding year's tax payable, if they feel that is more advantageous. If instalments are paid according to the CCRA's instalment reminders, no liability for interest or penalty will be assessed.