Filing your 2025 return late — penalties, interest, and what to do now
If you owe nothing, there is no late-filing penalty — just file as soon as possible. If you have a balance owing, file now: every complete month you wait adds to the penalty.
On this page
Estimate your penalty below. If you owe nothing, there's no penalty at all — just file.
Enter the amount you owe. If you're getting a refund, leave this at $0 — there's no penalty.
Complete months past the April 30, 2026 deadline.
Both conditions must apply. If you're unsure, leave unchecked.
No penalty — you don't owe any tax. File as soon as possible to avoid delays to your benefits.
If you owe nothing — no penalty
Zero balance owing = zero late-filing penalty
If your 2025 return shows a refund or a nil balance, there is no financial penalty for filing late — ever. File as soon as you can to receive your refund and prevent benefit disruption (CCB, GST/HST credit).
How the penalty is calculated
The standard late-filing penalty is 5% of your balance owing on April 30, 2026, plus 1% for each complete month late, up to a maximum of 12 months. The maximum standard penalty is therefore 17% of the balance owing.
Complete months are counted from May 1. A return filed on June 29 is 1 complete month late. A return filed on July 1 is 2 complete months late.
The penalty is assessed on the balance owing at the original filing deadline — not on total tax, not on the amount calculated at the time of filing.
If you can't pay
File your return immediately regardless of whether you can pay. Filing stops the late-filing penalty. Only interest accrues on unpaid balances — and interest, while compounding daily, is far less expensive than the penalty.
After filing, contact CRA at 1-888-863-8657 or through CRA My Account to arrange a payment schedule. CRA is generally cooperative with taxpayers who reach out proactively.
Repeat offenders
If CRA assessed a late-filing penalty on your return in any of the three prior tax years (2022, 2023, or 2024) AND issued a formal demand to file the current return, the higher penalty applies: 10% of the balance owing plus 2% per complete month late, up to a maximum of 20 months. The maximum repeat-offender penalty is 50% of the balance.
Both conditions must be met — a prior penalty alone, without a formal CRA demand, still results in the standard 5% rate.
Interest on unpaid taxes
CRA's prescribed interest rate on overdue taxes is set quarterly. Interest compounds daily from May 1, 2026 on both the unpaid balance and on any late-filing penalty assessed. There is no grace period.
Interest accrues even on balances in a payment arrangement — it does not pause. Each payment you make reduces the balance that future interest compounds on, so paying more sooner always reduces total interest cost.
Taxpayer Relief Program
If extraordinary circumstances caused your late filing — serious illness, natural disaster, CRA processing error — apply for relief using Form RC4288. CRA can cancel or waive penalties and interest when circumstances were genuinely beyond your control.
Provide documentation (medical records, disaster declarations, correspondence showing CRA delays). Applications can go back up to 10 years from the original assessment date. CRA has discretion — approval is not guaranteed but worth pursuing in qualifying situations.
Action: file your return first, then apply for relief. Relief will not be granted if the return is still outstanding.
How to file now
NETFILE is open for 2025 returns until January 29, 2027. Any NETFILE-certified software works — see the free software guide for options that cost nothing. Wealthsimple Tax is the fastest path for most situations.
If it's after January 29, 2027, you must file a paper T1 return or use a tax professional with EFILE access. The 10-year voluntary disclosure window still applies regardless.
Common mistakes
Mistake
"I can't pay, so what's the point of filing?"
The point is the penalty. Filing on time stops the 5% late-filing penalty even if you don't pay a cent. Only interest accrues on an unpaid balance — and interest is far cheaper than penalty plus interest. File immediately.
Mistake
Assuming the late-filing penalty applies when you have a refund
The late-filing penalty is calculated on your balance owing. If you owe nothing — or are getting a refund — the penalty is exactly $0. Late filing with a refund only delays your money.
Mistake
Confusing interest and penalty as the same thing
They are separate. The penalty is assessed on your filed return and added to the amount owing. Interest then accrues on both the unpaid balance AND on the assessed penalty. Both compound daily from May 1, 2026.
Quick wins
Quick win
File immediately — every complete month costs 1% (or 2%)
Each complete month after April 30 adds 1% of your balance in penalty (2% for repeat offenders). A return filed June 29 is 1 month late. A return filed July 1 is 2 months late. Filing today stops the clock.
Quick win
Pay whatever you can now
Interest accrues only on the remaining unpaid balance. Even a partial payment made now reduces the base that daily interest compounds on.
Quick win
Disputing the balance? File your best estimate and amend later
If you believe CRA's assessment is wrong or you're missing slips, file a return with your best estimate of income and pay that amount. You can amend once you have accurate information. This stops the late-filing penalty clock.
FAQ's
Is there a penalty if I'm getting a refund?
No. The late-filing penalty is calculated as a percentage of your balance owing. If your balance owing is $0 — whether because you're getting a refund or because you have no taxes owing — the penalty is $0. Filing late with a refund only delays your refund; there is no financial penalty. However, late filing can temporarily pause benefit payments (CCB, GST/HST credit) until your return is assessed.How is the late-filing penalty calculated?
The standard penalty is 5% of the balance owing on the filing deadline, plus 1% for each complete month the return is late, up to a maximum of 12 months. So the maximum standard penalty is 17% of the balance. Complete months are counted from May 1 — a return filed June 29 is 1 complete month late; a return filed July 1 is 2 months late. Interest also accrues daily on both the unpaid balance and the assessed penalty from May 1, 2026.What if I was penalized last year too?
If CRA assessed a late-filing penalty on your return in any of the three prior tax years AND also issued a formal demand to file for the current return, the higher penalty rates apply: 10% of the balance owing plus 2% per complete month late, up to 20 months. The maximum repeat-offender penalty is 50% of the balance owing. Both conditions (prior penalty AND CRA demand) must apply — a late return without a CRA demand still uses the standard 5% rate.Can CRA waive penalties for illness or hardship?
Yes. The Taxpayer Relief Program (Form RC4288) allows CRA to cancel or waive penalties and interest when circumstances beyond your control prevented timely filing or payment. Qualifying circumstances include: serious illness or accident, natural disaster, CRA processing error or delay, and extreme financial hardship. You must provide documentation (medical records, disaster declarations, etc.). CRA has discretion — approval is not guaranteed but is worth pursuing if your situation qualifies.When does NETFILE close — can I still file online?
NETFILE accepts 2025 T1 returns until January 29, 2027. If you're filing after that date, you must either mail a paper T1 return to your tax centre or have a tax professional file via EFILE (the professional version, which has no closing date). NETFILE returns filed on time receive refunds in approximately 8 business days via direct deposit — paper returns take 4–8 weeks.