Personal Finance

CRA - Arrears of Interest

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  • May 5th, 2022 12:30 pm
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[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes

CRA - Arrears of Interest

Filed tax return today (ahead of the May 2 deadline for 2022). CRA sends the Express Notice of Assessment within a minute of filing it. On reviewing the Express Notice of Assessment, they added a small arrears of interest and the pay by date is May 24.

My assumption is the arrears of interest they calculated on the Express Notice of Assessment is for period of May 3 - 24. If so, will CRA refund the arrears of interest if the full amount is paid in full before or on May 2?
41 replies
Deal Fanatic
Jan 19, 2017
6769 posts
3878 upvotes
PatrickRedFlagDeals wrote: Filed tax return today (ahead of the May 2 deadline for 2022). CRA sends the Express Notice of Assessment within a minute of filing it. On reviewing the Express Notice of Assessment, they added a small arrears of interest and the pay by date is May 24.

My assumption is the arrears of interest they calculated on the Express Notice of Assessment is for period of May 3 - 24. If so, will CRA refund the arrears of interest if the full amount is paid in full before or on May 2?
It should. Are you sure the interest is not due to some installments you missed? CRA never charged interest if you filed by the due date and pay by the date specifified in the NOA.
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
Positive ... Since I had no tax installments due during the tax year.

My assumption is CRA's Express Notice of Assessment automatically gets generated with a pay by date 1 month from the day you filed your tax return.

If submitted today (April 23), the Express Notice of Assessment Pay by Date works out to be May 24. So CRA calculates arrear interest from May 3 to May 24 since the deadline this year is May 2 (April 30 is on a weekend)
Member
Aug 18, 2019
355 posts
291 upvotes
I am in similar situation too with hefty tax owing but I've got no arrears interest/penalty added into my May 24 deadline. I just have the amount owing i need to pay to CRA by May 24. So not sure why the difference. And i never had any instalment in whatever form before ever.
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[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
I’ll just pay the full amount including the arrear interest (it’s a small amount anyways) prior to payment deadline of May 2, 2022.

According to the following link, the arrears interest is for the period after May 2 and the Pay by date on the NOA. If you pay before or on May 2, CRA should refund back the arrears interest.

https://www.reddit.com/r/PersonalFinanc ... 3_2021why/

On reading the Express Notice of Assessment again, I noticed the following line:

“Your balance due includes arrears interest compounded daily at a set rate. We calculated this interest from the due date of your balance to the date of this notice.

@clueless dude No idea why no arrears interest was added onto your NOA but that’s good news for you.
Deal Fanatic
Jan 21, 2018
6587 posts
6904 upvotes
Vancouver
Seems weird to me. My family all got our Express NoA back within minutes of Efiling in the last couple of weeks (after Apr 2), and none of us had any mention of interest due on amounts owing for post-May 2 We didn't pay the outstanding amount until days after receiving the Express NoA.
Deal Fanatic
Feb 4, 2015
7919 posts
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Canada, Eh!!
Same here... got small amount of arrears interest on express NOA.
Last edited by georvu on Apr 24th, 2022 9:24 pm, edited 1 time in total.
2022: BOC raised 2 times and MCAP raised its prime next day.
2017 to 2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
Deal Expert
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Dec 12, 2009
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Toronto
It seems like with the express notice of assessment process, the CRA no longer gives the taxpayer a few working days to pay off the balance owing and have to resort to including various projections. I can see a lot of taxpayers being totally confused why they are getting notices of assessments that don't properly reflect taxes owning and taxes paid.
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Deal Fanatic
Jan 19, 2017
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PatrickRedFlagDeals wrote: Filed tax return today (ahead of the May 2 deadline for 2022). CRA sends the Express Notice of Assessment within a minute of filing it. On reviewing the Express Notice of Assessment, they added a small arrears of interest and the pay by date is May 24.

My assumption is the arrears of interest they calculated on the Express Notice of Assessment is for period of May 3 - 24. If so, will CRA refund the arrears of interest if the full amount is paid in full before or on May 2?
I am assuming you used Netfile from your tax software. There is an option you can select that asks’ are you going to pay your Balance in the next 5 days?’. May bé if you didn’t selec that, it would include interest on your NOA, especially it is very close to the payment due date.
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
ml88888888 wrote: I am assuming you used Netfile from your tax software. There is an option you can select that asks’ are you going to pay your Balance in the next 5 days?’. May bé if you didn’t selec that, it would include interest on your NOA, especially it is very close to the payment due date.
I recall seeing that question in previous years when doing my tax return but did not see it this year. It’s fully paid including the arrears interest so I’ll wait and see if the arrears interest gets refunded back to me at a later date.
Deal Fanatic
Feb 4, 2015
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Canada, Eh!!
ml88888888 wrote: I am assuming you used Netfile from your tax software. There is an option you can select that asks’ are you going to pay your Balance in the next 5 days?’. May bé if you didn’t selec that, it would include interest on your NOA, especially it is very close to the payment due date.
Our software states they assume any balance owing will be paid within 5 days... no option box.
2022: BOC raised 2 times and MCAP raised its prime next day.
2017 to 2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
For those of you who have an arrears interested added onto their NOA, was the assessment date on your NOA on or after May 3, 2022? Would be curious to know if anyone who had an assessment date of May 2, 2022 or earlier had any arrears interested added on.
Deal Fanatic
Feb 4, 2015
7919 posts
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Canada, Eh!!
PatrickRedFlagDeals wrote: For those of you who have an arrears interested added onto their NOA, was the assessment date on your NOA on or after May 3, 2022? Would be curious to know if anyone who had an assessment date of May 2, 2022 or earlier had any arrears interested added on.
May 3
2022: BOC raised 2 times and MCAP raised its prime next day.
2017 to 2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
FYI … CRA processed my payment last night. They reversed the arrears interest and I now see that amount as an “Unallocated Payment”.
Deal Fanatic
Jun 24, 2015
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the interest is for people who owned money last year. they gave a year extention to pay taxes, my buddy saw it on the news and called me to tell me about it, hence why i can not link to a phone call i had as a reference.
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Sr. Member
Jan 3, 2013
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Mississauga
PatrickRedFlagDeals wrote: For those of you who have an arrears interested added onto their NOA, was the assessment date on your NOA on or after May 3, 2022? Would be curious to know if anyone who had an assessment date of May 2, 2022 or earlier had any arrears interested added on.
I netfiled on the same day as you did and do not have interest added to my amount owing. My NOA is dated May 3 and states I have until May 24 to pay.

I'm confused - does this actually mean CRA won't charge interest if I pay by May 24?
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
looking4deals1 wrote: I netfiled on the same day as you did and do not have interest added to my amount owing. My NOA is dated May 3 and states I have until May 24 to pay.

I'm confused - does this actually mean CRA won't charge interest if I pay by May 24?
To be on the safe side, just pay the full amount on the NOA before or on May 2, 2022. This is the only way to be certain there are no unexpected arrears interested added on.
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Nov 14, 2003
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LaLaLand
PatrickRedFlagDeals wrote: For those of you who have an arrears interested added onto their NOA, was the assessment date on your NOA on or after May 3, 2022? Would be curious to know if anyone who had an assessment date of May 2, 2022 or earlier had any arrears interested added on.
I had the same thing. I filed my taxes two days ago and the NOA was dated May 3. I called in and they said if I pay by May 2 or 3, the interest charge will be reversed.
ml88888888 wrote: It should. Are you sure the interest is not due to some installments you missed? CRA never charged interest if you filed by the due date and pay by the date specifified in the NOA.
This seems like some computer glitch this year. I don't owe any back taxes and I over-paid my installments anticipating a large tax bill.
[OP]
Newbie
Jun 9, 2017
69 posts
24 upvotes
batcave wrote: I called in and they said if I pay by May 2 or 3, the interest charge will be reversed.
Wow …. How long did it take you to get through to an agent?
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Nov 14, 2003
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LaLaLand
PatrickRedFlagDeals wrote: Wow …. How long did it take you to get through to an agent?
It took about 40 minutes to get through to an agent. Not too bad.

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