The government levies penalties on late or delayed tax filings. If you have an unpaid tax balance, you are likely to have to be charged with a penalty. 

However, if you are getting a refund or have zero tax balance, you can return taxes after the deadline without any penalties.

Here are the penalties for late filing your income tax in Canada and benefit return when you owe the Canda Revenue Agency:

Late Tax Filing Penalty

A 5% penalty on your remaining tax balance plus 1% of your balance multiplied by the number of months you are running late.

For instance, if you owe the CRA $2000 in taxes and decided to send in your tax return 12 months late, your tax bill will amount up to:

• $2000 x 5% = $100 plus 
• $2000 x 1% x 12 = $240 
• = $340

Increasing your overall bill of $2000 to $2340.

This amount does not include the additional interest penalty.

Had you been late in filing taxes for the previous year as well, the CRA can increase your late filing penalty to 10% of your tax balance plus 2% per month for a maximum of 20 months.

Late Tax Filing Interest

Besides late filing penalties, the government will also charge interest on the amount of taxes owed to it. 

On some instances, CRA might waive off the penalties if you are able to demonstrate that certain circumstances beyond your control hindered your compliance with your tax obligations. These circumstances include lack of financial resources, natural or man-made disasters, serious illness or disease, postal strike, etc.

You can use Form RC4288 to request the CRA to waive off your penalties.
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