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If you don’t report all of your income
If you fail to report an amount on this year’s return and you also failed to report an amount in any one of the previous 3 years, you may have to pay a federal and provincial penalty. If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income and you may have to pay a penalty. Learn more about interest and penalties.
You’ll pay federal and provincial or territorial penalties each equal to the lesser of:
- 10% of the unreported amount on your 2018 return, and
- 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.
If you make a false statement or omission
You may also have to pay a penalty if you knowingly make a false statement or omission on your tax return.
The penalty is the greater of:
- $100, and
- 50% of the understatement of tax and/or the overstatement of credits related to the false statement or omission.
If you repeatedly fail to report any of your income on your tax return, you’ll pay a 10% federal penalty plus a 10% provincial penalty on the unreported amount.
Voluntary disclosure
If you voluntarily tell the Canada Revenue Agency (CRA) about an amount you failed to report, it may waive some of these penalties. To qualify, you must meet these 4 conditions:
- You must approach the CRA yourself. If the CRA discovers the oversight and contacts you, you will not qualify for any relief.
- You must offer complete and full information.
- You must be facing a penalty.
- In most cases, the outstanding information must be more than 1 year overdue.
As of March 1, 2018 changes have been made to the Voluntary Disclosures Program (VDP).
To disclose your situation, complete Form RC199 and include any supporting documents. Even if the CRA waives the penalties, you’ll still have to pay the taxes plus interest.
Learn more about the CRA’s Voluntary Disclosures Program.
Warning
You’ll pay penalties if you:
- repeatedly fail to report your income
- knowingly make a false statement or omission
Take action
Tell the CRA about any amount you didn’t report. It may decide to waive the penalties.
