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The Canadian income tax return line 47600 is for "tax paid by installments".

Assuming I overpaid, if I enter less than the amount I actually paid (making the total owed or refunded be zero), will the unused portion automatically move into prepaid taxes for the next year?

I'm hoping it will simplify things (e.g. avoiding asking for a refund at the same time as I'm sending them an installment for about the same amount), but fear it might create a lot of additional paperwork instead.

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  • Not sure about Canada, but in the US this would be a sure way to get several months delay, and / or lose the money permanently... also, money from April reimbursements is considered a down payment for Jul/15 (for no good reason, because they can; even if you filed in January). Maybe the Canadians are better organized...
    – Aganju
    Apr 17, 2021 at 4:39
  • Putting incorrect information on a document you sign stating "I certify that the information given on this return and in any documents attached is correct and complete and fully discloses all my income" sounds like a bad idea.
    – Brian
    Nov 14, 2021 at 17:34
  • @Brian, one could reasonably interpret "tax paid by installments" as the amount of the tax calculated for this return that has already been paid by installments . Nov 14, 2021 at 18:36
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    No, one could not. Don't forget to read the guide which for the 2020 tax year currently reads: "Line 47600 – Tax paid by instalments In February 2021, the CRA will send you Form INNS1, Instalment Reminder, or Form INNS2, Instalment Payment Summary, which shows your total payments for 2020 that the CRA has on record. If you made an instalment payment for your taxes for 2020 that does not appear on this reminder or summary, also include that amount on line 47600 of your return."
    – Brian
    Nov 14, 2021 at 19:24
  • @brian, close, but still not definite. I think that's saying that if I've made several payments and the last one doesn't appear on their official statement yet, I'm allowed to include that payment too. I'll agree that the "also include" wording does sound more like a directive than a permission though. Nov 14, 2021 at 21:00

2 Answers 2

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In the US, the answer would be that it's best to report what you actually paid. The IRS here knows what is paid, anyway, and the refund etc.. will take place. But you stating a different amount paid than what is true is just not helpful or useful.

I don't know if that would be received differently in Canada though.

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Regardless of the hypothetical chance at penalty for false statement [which I find quite unlikely to even cross an agent's mind], you are setting yourself up for a headache.

Any difference between amounts you enter compared with the CRA's records is quite likely going to flag your return for some additional layer of review. I don't know off-hand if this is an error they would 'auto-correct' for you, nullifying your intent with the added problems caused by maybe giving an agent a headache to resolve it for you. If the error persists on assessment, then you almost certainly would get recognition of the true instalment amounts at some point, but it might require some back and forth to get it straightened out.

It isn't clear to me whether the CRA would initially 'rollover' your current year overpayment to cover off an underpayment from the following year. If they charged you interest for lack of payment for the following year [by 'missing' this rollover], it seems quite likely that after asking nicely with a letter, you could have that interest revoked in light of your current year overpayment, but that would definitely be more of a hassle than just receiving a refund and then making next year's payment per usual.

Do yourself a favour and set yourself up with auto-deposit with CRA, and getting your refund will be painless.

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