Did you received an unexpected deposit in your bank account with the description “Canada RIT” or “RIT/RIF”? If yes, it is a sign that the Canada Revenue Agency (CRA) has acknowledged your tax filing.
Want to learn more about what Canada Refund Income Tax (RIT) is or what to do with this kind of “freebie”? Then you are at the right place.
In this comprehensive guide, I explained what Canada RIT is, how it is calculated, the best things to do with it or spend it on, and more.
Let’s go there!
What is Canada RIT Deposit?
Canada RIT is a tax refund from the Canada Revenue Agency (CRA) paid to individuals or businesses upon filing their taxes in Canada. It is not paid at the same time to all taxpayers. Some will receive it immediately after filing their annual tax while others will not receive it when after the CRA completes a tax reassessment for them.
What Does Canada RIT Deposit Mean?
The Canada RIT deposit in your bank statement is a credit from the CRA. It is sometimes considered an acknowledgement of your tax filing. To confirm the RIT deposit, log in to your CRA My Account. Here you will also confirm if you have a notice of reassessment from the CRA.
Canada RIT Example
For businesses with an active CRA account, you may see the Canada RIT deposit labelled as “Small Business Job Credit”. This is given to help relieve businesses of Employment Insurance (EI) premiums they are obligated to pay.Additionally, it may reflect in your CRA business account with the caption “Job Credit 2020”. The EI premiums are reduced by the small business job credit from $1.88 to $1.60 for each insurable earnings of $100. Any business that paid $15,000 or less as employer EI premiums throughout the years is entitled to the small business credit.
Is Canada RIT/RIF Good?
This depends on whether you’re eligible for the Canada RIT deposit or not. If you’ve filed your annual tax return, a Canada RIT payment is a good thing. However, if you receive an RIT deposit accidentally before filing your annual tax returns, then you may need to worry.
Except if you can file your income tax as soon as possible, then you can retain the RIT deposit while avoiding any problem from the government.
How Much Do I Get in Canada RIT Deposit?
There’s no fixed amount on the Canada RIT. So the amount you receive may be as high as a few thousand dollars or as little as a few hundred dollars.
How much RIT deposit you get depends on what the refund is attached to. For example, income tax returns that were assessed will receive a Canada RIT deposit on a material basis.
In the long run, the assessment may lead to a lower RIT payment.
Who is Eligible for Canada RIT Deposit?
Every Canadian taxpayer is eligible for the Canada RIT/RIF deposit. This includes both individuals and business taxpayers in Canada.
When Do I Receive Canada RIT Deposit?
There’s no fixed duration on when you can receive the Canada RIT/RIF. That’s why many called it a surprise or an unexpected credit.
This is because you can either receive the RIT/RIF immediately after you file your tax return or later. You just can’t tell when!
Receiving the Canada RIT later means that your tax return has to undergo CRA reassessment.
You will be notified about this through mail or your CRA My Account.
After the reassessment, you can receive your RIT/RIF deposit any time of the year.
Note: It may take the CRA up to 3 years to reassess your tax return starting from the date you receive the first notice of assessment.
What to Do if You Received a Canada RIT Deposit?
The CRA makes RIT deposits based on different scenarios.
Whether in hundred dollars or thousands of dollars, there are things you need to do when you receive the Canada RIT deposit.
This will help you confirm the reason behind the RIT deposit you received.
Here are the three things to do when you receive the RIT/RIF deposit:
- Confirm your tax filing status: The first thing to do when you receive the RIT payment is to ask yourself whether you have filed your tax. If not, ensure that you do so as soon as possible to avoid any problem.
- Login to your CRA My Account: To confirm what the RIF deposit is meant for, log in to your CRA My Account. Here you will see all the notifications that apply to the RIF deposit and more.
- Seek help: If you couldn’t find any RIF-related notification to your CRA My Account, call the CRA at 1-800-959-8281.
The aim is to ensure that you are eligible for that deposit and know what the money is meant for.
What to Do With the Canada RIT Deposit?
Depending on how much RIF you receive, you may be wondering how to spend the money.
The truth is, the RIT credit is completely yours, and you decide how, when and where to spend it.
But you can be smart about how you spend your RIF deposit.
How? By saving and investing it in things that build your financial security. That’s to say; you should use the RIT deposit to:
- Build your emergency fund.
- Save for a down payment.
- Invest in a retirement account.
- Pay off your debts.
- Pay for your annual life insurance
You get the gist! Just ensure that you don’t spend the RIT deposit on things that don’t matter to your long-term financial security.
How Often Do I Receive the Canada RIT Payment?
You can receive the Canada RIT deposit as much as you file your annual tax return. That’s, once a year.
But like I said earlier, you may receive the RIT deposit immediately when you file your tax return or any time of the year.
If you receive your RIT deposit any time of the year, it means the CRA has issues with your tax filing, and so it has to reassess your tax.
You will find notice of tax reassessment on your CRA My Account or by mail indicating your qualification for the tax refunds.
Do I Need to File My Taxes to Receive the Canada RIT/RIF Deposit?
Yes, you need to file your annual tax return to qualify for the RIT/RIF deposit.
However, there are times when the CRA mistakenly sent the RIT deposit to those that didn’t file their tax returns.
In such a situation, you need to file your tax return as soon as possible to avoid any problems.
So it’s advisable to always confirm that you’re eligible for the RIF deposit before using it.
The Canada RIT/RIF deposit is a good thing for those that are eligible for it. This is because you can use the money to boost your savings and investment.
But if you received the RIT deposit without qualifying for it, you may land yourself in big trouble.
Furthermore, you need to know what the RIT deposit is meant for before using it.
You can find this information on your CRA My Account or by contacting the CRA.
What is Canada RIT For?
Canada RIT is a credit given to eligible Canadian taxpayers.
The CRA paid the RIT for different reasons such as for material or business growth etc.
It is always important to confirm the reason behind the RIT deposit through your CRA My Account before using it.
What is Canada RIF?
Canada RIF is another name for Canada RIT. It is a tax refund from CRA to eligible Canadian taxpayers, both individuals and businesses.
What Does RIT Stand For?
It stands for Canada Refund Income Tax. RIT is a tax refund from CRA to individual and business taxpayers in Canada.
Is Canada RIT Taxable?
No. Your RIT deposit is not taxable. This allows you to use the money without including it when filing your tax returns.
How Long Does it Take to Receive the Canada RIT Payment after I Submit My Taxes?
There’s no specific time when you can receive the RIT payment after your tax filing.
You may receive it immediately after filing your tax return or at a random date.
Why you may receive your RIT payment at a random date is because the CRA found errors in your tax filing.
This means the CRA has to reassess your tax filing before paying your RIT deposit.
However, the CRA will notify you about it through your CRA My Account or mail.
What is the CRA Reassessment Period?
It may take the CRA up to 3 years to reassess your tax return from the date of the first notice.
Where Can I Get More Details on the Canada RIT Deposit?
To get more details on the Canada RIT deposit, log in to your CRA My Account or call the CRA at 1-800-959-8281.
If you’ve more questions, let me know in the comment section.