Tax advice
Instalment Payments
What Are Instalment Payments?
An instalment payment is a prepayment of income tax.
Instead of waiting until the end of the year to pay the entire tax balance, Revenu Québec (and the CRA federally) require some taxpayers to make periodic payments during the year.
These payments cover estimated taxes, helping you avoid a large balance owing when you file your tax return.
Why Do You Receive a Notice?
You receive an Instalment Payment Notice when Revenu Québec estimates that you will owe more than a certain threshold (generally $1,800 in Québec and $3,000 federally).
This often happens in situations such as:
-
You are self-employed;
-
You earn investment, rental, pension, or other income without tax withheld at source;
-
The deductions withheld from your salary are not enough to cover your actual tax liability.
Is It Important to Pay Before the Deadline?
Yes.
-
If you pay on or before the due date, your payments are applied directly to your account, and you avoid extra charges.
-
If you don’t pay or pay late, Revenu Québec and the CRA may charge interest (calculated daily, non-deductible) and sometimes a penalty for repeated non-compliance.
-
Interest begins the day after the due date and is charged until the full payment is made.
In short: making your instalment payments on time helps you avoid unexpected tax bills and costly interest charges.
Without Prejudice.