You’ve diligently gathered your tax slips, tallied up your deductions, and even painstakingly calculated your work from home tax credit.
How long does it take to get a tax return in Canada?
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You’ve filed your taxes, either online or in person, and now you’re waiting for your return. But just how long is that going to take?
If you’re waiting on a large refund, the time between filing and receiving your refund can seem like an eternity.
In this WealthRocket article, we’ll take a look at how long you’re going to have to wait to receive your tax return in Canada this year.
How long does it take to get a tax return in Canada for 2022?
The length of time it takes to get a tax refund in Canada is typically between 2 to 16 weeks and depends on a few factors:
- How you filed
- Whether you have direct deposit enabled.
The deadline for filing taxes for the financial year 2021 is May 2, 2022. Typically, the deadline is April 30, but this year it falls on a Saturday, and therefore there is an extenstion on the deadline.
Here are the various timelines based on these factors:
Filing Your Taxes Online With Direct Deposit
Filing online is arguably the fastest way to receive your income tax refund. If you file your return electronically through a NETFILE certified online tax preparation software, you will not only receive an instant Notice of Assessment (NOA), but you’ll also receive your refund in eight business days.
Filing Your Taxes Online Without Direct Deposit
If you submit your return online and you don’t have direct deposit configured, you’ll have to wait for the Canada Revenue Agency (CRA) to mail you a cheque. This process takes approximately two weeks to receive your refund, according to the CRA.
If You File a Paper Return with Direct Deposit
If you file your return by mail (which the CRA is officially discouraging in 2021, they prefer that you file online if possible), your refund will be significantly delayed by the processing times for paper returns. The CRA estimates that you’ll receive your refund about eight weeks after you file.
If You File a Paper Return Without Direct Deposit
If you file a paper return and submit documents the CRA has to mail you a cheque, you’ll have to wait for the processing period and the time it takes to mail the refund cheque for a total of about ten weeks to process and send your refund.
If You File In-Person at a Branch and Receive an Instant Refund
Many in-person tax filing services offer “instant refunds,” but these refunds are not really from the CRA.
They are from the tax filing service themselves, who advance pay out your refund and then use the CRA deposit to cover the payout.
These instant refunds are deposited into your bank account on the same day or within a few days but often come with hefty fees.
How to Check on the Status of Your Return
You can check on the status of your return by signing into the CRA My Account function or calling the CRA directly.
There are several reasons your return may not be processed promptly, cause a delay in receiving your refund.
The most common is if your return was selected for review, but the CRA may also delay your refund if:
- You owe or are about to owe a balance
- You have a wage garnishment order under the Family Orders and Agreements Enforcement Assistance Act.
- You have outstanding government debts like student loan debts, employment assistance, or others.
- You have a refund of $2 or less.
What Should I Do With My Income Tax Returns?
When you receive your income tax refund, you may be tempted to spend it on consumer goods.
While retail therapy may be one of the things you do with your refund, here are some great ways to put your refund to work on helping you improve your finances:
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Save
Put your money in a high-interest savings account or save it for a rainy day (or a global pandemic). Cash in a savings account can be accessed quickly in an emergency and help you avoid high-interest debt.
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Invest
Using your refund to jump start or bolster your investment accounts is an excellent way to make your money work for you for years to come. If you’ve never invested before, getting started with a robo advisor is easy and can be done with as little as $1.
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Debt
If you have debt, using your income tax refund to pay it down is an excellent way to jump-start enthusiasm for debt repayment. Focus on paying off high-interest debt first, like credit cards and lines of credit, and then focus on low-interest debt like personal loans and car loans. If you only have a mortgage with an interest rate under 2%, you are better off saving your refund or investing it.
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Spend
COVID-19 has been taxing on every Canadian’s mental health. If an item you’ve been eyeing will bring you joy or make your life at home more enjoyable, your refund is a perfect way to make that purchase.
The Bottom Line
If you filed your income tax return in 2021 and you are expecting a refund, congratulations! Income tax refunds can feel like windfalls and are the perfect tool to get ahead on your financial goals.
Whether you are planning to save, invest, or pay down your debt, your income tax refund will probably put your months closer to your goals, and that feels like a win. After the year we’ve all had, you deserve a win.
That said, if you want to spend some of your income tax refund, that’s ok too! We recommend allocating at least 10% of your income tax refund to spend or reward yourself for making it through a challenging year.
Whatever your plan, the fastest way to receive your income tax refund (without paying unnecessary fees) is to file your income tax return online and have direct deposit set up.
If you don’t have direct deposit configured yet, you can do so through your CRA My Account.
Jordann Kaye
Frequently Asked Questions
If your income tax refund has been issued to you by cheque in previous years, it will never expire.
Any uncashed cheques from the CRA never expire or become “stale-dated.” If your cheque was stolen or destroyed, you could request a duplicate payment by contracting the CRA or signing into your My Account portal and select “Uncashed Cheques.”
Suppose you find an uncashed cheque and your financial institution is unwilling to cash it. In that case, you can mail the cheque to the Imaging and Receiver General Operations Directorate and ask to have the payment reissued.
Because you overpaid on your taxes, the government is giving you back that money in the form of a refund. This money is not taxable, as it represents money you’ve already earned, and the government has already collected the appropriate amount of taxes from you.
No, if you owe the government of Canada taxes if you have outstanding government debts like unpaid student loans, if you have a garnishment order under the Family Orders and Agreements Enforcement Assistance Act, you will not receive a refund.
If you have other federal or provincial outstanding government debts like employment insurance or social assistance benefits overpayments, you will not receive a refund.
