Can You Transfer Your Refund?

By Randall Orser | Personal Income Tax

Tax Refund TNWell, that depends. There are situations where you can transfer the refund, and, sometimes, Canada Revenue Agency (CRA) will do it for you. You have to remember that your refund belongs to you, and, therefore, it’s not something that can just be transferred to anyone.

Instalment Account

If in 2015, you got a refund, and you know that for 2016 you’re going to owe, you can transfer your refund to your instalment account. You can do this when you file electronically, and if you’re using a tax preparer let them know, before they file, you’d like to transfer your refund to your 2016 instalment account.

If you paper file, which I hope you don’t, then you include a note with your tax return indicated that you wish to transfer any refund to your 2016 instalment account.

CRA will transfer your full refund to your instalment account and consider this payment to be received on the date they assess your return.

Amounts Owing

While technically not a transfer, CRA will use any refund you get to pay off debts, and not just to CRA. If you owe CRA monies for prior years, or your GST/HST (for small business owners), then your refund goes to pay those off first.

There are some other debts, to which CRA will ‘transfer’ your refund. Canada child tax benefit (CCTB), Universal child care benefit (UCCB), Working income tax benefit (WITB), are the ones that CRA administers, and, if at any time these were overpaid, CRA will take the money back via your refund.

Some other tax related programs where CRA will transfer your refund is: payroll deductions, corporate income tax, customs and excise.

Some other government programs where CRA will transfer your refund:

  • Defaulted Canada Student Loans
  • Employment insurance overpayments and penalties
  • Training Allowances Payment System overpayments
  • Canada Pension Plan overpayments
  • Grants and contributions overpayments
  • Operations and maintenance receivables
  • Other Employment and Social Development Canada program overpayments and/or penalties

The one thing CRA will not transfer your refund to is another person, not even a spouse. Your refund belongs to you, and, as far as CRA is concerned, yours alone. Even if your spouse owes CRA money, they won’t use your refund to pay for it.

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