Missing a tax deadline as a self-employed Canadian has real consequences — but they are manageable if you act quickly. Here is exactly what happens when you miss each key deadline, and what to do about it.
Missing the April 30 Payment Deadline
If you owe tax and do not pay by April 30, the CRA charges daily compound interest on the unpaid balance starting May 1. The prescribed interest rate for overdue taxes is approximately 7–8% in 2026, set quarterly.
If you file on time but pay late, only interest applies — no late-filing penalty. Interest is the smaller consequence of the two.
What to do: Pay as much as you can immediately. Even a partial payment stops interest from accumulating on the paid portion. Contact the CRA to arrange a payment plan for any remaining balance (1-888-863-8657).
Missing the June 15 Filing Deadline
If you file your T1 return after June 15 with a balance owing, a late-filing penalty applies:
- First time late: 5% of your balance owing on June 15, plus 1% for each additional complete month the return is late, up to 12 months maximum
- Repeat late filer (penalized in any of the 3 prior years AND CRA formally demanded the return): 10% of balance owing plus 2% per month, up to 20 months
Example: $5,000 owing, filed 4 months late for the first time: 5% + (4 × 1%) = 9% × $5,000 = $450 penalty, plus interest on both the original $5,000 and the penalty from May 1.
If you are owed a refund or have zero balance owing: No late-filing penalty applies. However, delayed filing means delayed benefits (Canada Child Benefit, GST/HST credit, carbon rebate) — these rely on your filed return to calculate payments.
If You Haven’t Filed for Multiple Years
Not filing for one or more years is more serious but still fixable. The CRA can file a “deemed return” with limited information and send you a notice of assessment with a significant balance — often higher than what you actually owe, since they cannot account for your expenses.
Voluntary Disclosures Program (VDP): If you come forward before the CRA contacts you about unfiled returns, you may qualify for relief through the VDP (Form RC199). Benefits include: penalty relief, possible interest reduction (up to 50%), and no prosecution for the disclosed tax years. A CPA can file VDP applications and negotiate on your behalf.
Interest Rates and Penalties in 2026
| Item | Rate / Amount |
|---|---|
| Interest on overdue taxes (Q1 2026) | ~7–8% compounded daily |
| Late-filing penalty (first time) | 5% of balance + 1%/month (max 12 months) |
| Late-filing penalty (repeat) | 10% of balance + 2%/month (max 20 months) |
| GST/HST late filing | A + (B × C) formula (see GST/HST deadline article) |
| Instalment interest | Prescribed rate (7–8%) from missed date |
The Most Important Rule: File Even If You Can’t Pay
If you cannot afford to pay your tax owing, file the return anyway by June 15. The late-filing penalty is calculated on the balance owing — it compounds the damage. Filing without paying starts interest but avoids the penalty. You can then contact the CRA to arrange payment terms for the balance.
Frequently Asked Questions
Will the CRA come after me if I’m a year or two behind on filing?
The CRA does contact taxpayers who have not filed in 1–2 years, especially if you had T4s or other slips that were reported to the CRA by employers or financial institutions. The CRA cross-references slips against filed returns. Proactively filing before contact is always better — it qualifies you for the VDP and avoids escalation to collections.
Can I get penalties waived if I had a legitimate reason for missing the deadline?
Yes. The CRA’s Taxpayer Relief Program (RC4288) allows cancellation or reduction of penalties and interest if you had extraordinary circumstances beyond your control: serious illness, natural disaster, or CRA processing errors. Financial hardship alone is not sufficient for relief, but serious situations are considered individually. Apply within 10 years of the tax year involved.
Does missing a filing deadline affect my CRA benefits?
Yes. The Canada Child Benefit, GST/HST credit, Ontario Trillium Benefit, and federal/provincial carbon rebates are all calculated based on your filed T1 return. If you file late, these benefits may be paused or reduced until your return is processed. Once you file, the CRA recalculates and may send a lump-sum catch-up payment for months missed.