Every year, plenty of Canadians receive a surprise deposit in their bank account titled “Canada RIT” or “RIT/RIF”.
While no one wants to complain about “free” money, it can also be a trigger for concern: What is this for?
Let’s start by putting your mind at ease: the Canada RIT is a tax refund deposit from the Canada Revenue Agency (CRA), and it stands for Refund Income Tax.
Every year, after you file your tax return, the CRA will assess your income and how much tax you paid that year.
If you paid more taxes than what was required, you will receive a tax credit, which would be the Canada RIT.
Who is Eligible for a Canada RIT/RIF Deposit?
All Canadians that pay taxes are eligible for a Canada RIT/RIF deposit.
Both individual and business taxpayers are able to receive these deposits.
The only factor that will dictate whether you receive one in a given year is whether or not you overpaid your taxes that year.
Keep in mind that even if you didn’t earn any income in a particular year, you should still file your taxes.
You won’t receive the Canada RIT deposit if you don’t file your taxes, as well as many other benefits you may be eligible for.
How to Get More Details About Your Tax Return?
With all the risks of fraudulence out there, we don’t blame you for wanting to double check that the money you get from Canada RIT is, in fact, yours.
So, if you want to confirm that this deposit was correctly made by the CRA, you can speak with them either through the phone by calling the CRA at 1-800-959-1956, or you can check online.
The easiest, quickest, and safest way to get more information about your tax return is by visiting My Account.
When you log onto your CRA account dashboard using your preferred login method, you should see a message in the ‘Messages’ section which will outline your return amount and why you received the deposit.
Signing up for online access through My Account is a great idea regardless, since you can have instant access to your personal tax information at the click of a few buttons, as opposed to waiting on hold or having to wait until CRA business hours.
On My Account, you can also review your Notice of Assessment (NOA), Notice of Reassessment (NOR), information about your filed taxes, and other tax-related information.
What Should I do with my Tax Return?
Well, that’s up to you! Depending on the amount of your return, you could use it to top up your emergency fund, pay off credit card debt, buy groceries, invest in some stocks, or even just take your kids out for dinner.
Use it how you feel you need to – it’s your money once you receive it.
That said, saving and investing is always a great idea, if the option is available to you.
You can put it towards your TFSA (just make sure you don’t go over your limit) or your RRSP to contribute towards your retirement.
If you’re unsure of how to spend it and want a second opinion, you can always make an appointment with a financial advisor to discuss your options.
The good news? You won’t have to pay taxes on your Canada RIT deposit, since it’s a refund of taxes you have already paid in the past.
Frequently Asked Questions
- Why did I get an unexpected tax refund?
Every year, after you file your tax return, the CRA will assess your income and tax payment. If you paid more taxes than you needed to, you will receive a tax return, which is the Canada RIT.
If you have already set up direct deposit with the CRA, the benefit will be automatically deposited in your bank account. If not, you will receive it as a cheque.
- Is Canada RIT your tax return?
Yes, it is. You should receive it within 2 to 8 weeks of filing your taxes if you reside in Canada, and in up to 16 weeks if you reside outside of Canada. Sometimes, it can pop up at an odd time during the year – this is likely due to the CRA reassessing your previous years’ taxes and realizing that you were owed some money. In these cases, you should find a Notice of Reassessment on My Account. Keep in mind that CRA can reassess your taxes for up to 3 years after you filed them.