TAX TIP CRA Debt Recovery Activities May Impact Upcoming Benefit, Credit, and Refund Payments

Monday, 03 April 2023 04:33.PM

The Canada Revenue Agency (CRA) has resumed efforts to recover taxpayers' debt. One of the tools the CRA uses to recover debt is called offsetting. Offsetting proactively applies tax refunds and benefit payments (such as the GST/HST credit) to tax debts and other government debts. To learn more about how government payments can be applied to specific debts, go to canada.ca/balance-owing.

Debt recovery is ongoing and will impact upcoming benefit and credit payments, including:

• the goods and services tax / harmonized sales tax credit (GST/HST credit) issued on April 5
• the Ontario trillium benefit issued on April 6.

How to identify a debt

Individuals are notified when a benefit or credit payment is made or if a change is made to their account based on their personal situation (for example, a change in marital status or custody). An individual will receive their notice of redetermination or statement of account identifying if a benefit or credit was used to pay down a debt. These notices may be issued by mail or accessed through My Account.

Cases of financial hardship

The CRA understands that some families may continue to experience financial challenges related to the current economic situation. We encourage anyone who is experiencing these financial difficulties to contact the CRA without delay to discuss , even if they already have a payment plan in place. The CRA is here to help.

To discuss benefit debt, call 1-888-863-8662. To discuss tax return debt, call 1-888-863-8657.

How to avoid incurring a debt in the future

Government debt can result from a change in eligibility for benefits and credits or from overpayments. The easiest way to avoid this situation is to let the CRA know when your personal situation changes, as you may no longer be eligible for certain benefits or credits.

Background<>

How offsetting works<>

Offsetting is a standard operating procedure that was used pre-pandemic by the CRA to collect outstanding taxpayer debt.

In May 2020, the CRA proactively paused most offset mechanisms in response to the COVID-19 pandemic. The pause was a temporary measure, like other COVID-19 relief tactics, to support taxpayers during a challenging time.

SOURCE: Canada Revenue Agency