The Canada Revenue Agency is reminding taxpayers with balances owing that payment options may be available when a tax debt cannot be paid in full right away.
In a June 18 tax tip, the CRA said people who receive a call or letter about money owing should review their options early. The agency said waiting can allow additional interest, penalties, or collection steps to build up.
The notice highlights the Manage balance service in CRA My Account. The CRA said taxpayers with a personal income tax debt or COVID-19 benefit debt of $1,000 or more may be able to use the service to resolve the debt online without speaking to a collections officer.
The service is designed for payment handling rather than debt forgiveness. According to the CRA, it can be used to make a full or partial payment and to schedule a series of payments where the taxpayer qualifies to use the online process.
Amounts owing remain payable, and interest can still matter. What changes for eligible taxpayers is the route for dealing with the balance: a payment arrangement may be available online before the file moves further into collections.
The practical takeaway is to respond once a balance is identified, check whether Manage balance is available in CRA My Account, and avoid letting a smaller payment problem become a larger collection issue.