Tax time often comes with surprises. For some people, that surprise is in the form of a generous tax return. In other cases, you owe money to the government. When that happens, there are three possibilities: you make your payment in full, you pay in instalments, or you cannot pay. Today’s post will discuss your tax payment plan options and how to choose the right one for you.

Tax Payment Plan Options

Let’s go back to those three possible options when it comes to tax payments to the CRA:

  • Paying your debt in full
  • Arranging to pay your debt over time
  • You are unable to pay your debt

Next, let’s explore each of these tax payment plan options in further detail to help you understand your path forward.

Tax payment plans in Canada

Paying your debt in full

If you can pay in full right away, there are three ways to do so: online, in person, or by mail. 

Keep in mind; if you make a payment to the Canada Revenue Agency, allow three business days for online payments to show on your account and ten business days for payments by cheque or money order.

Arranging to pay your debt over time

This tax payment plan is a popular choice for those dealing with financial difficulties or bankruptcy in Canada. Instead of paying their entire CRA debt in full, arranging to pay in instalments is more manageable.

The CRA works with you to find the best way to pay your debt through a payment arrangement with these four steps:

  1. First, you will calculate your monthly income and expenses (here’s a worksheet to help you do just that)
  2. Next, you’ll determine how much you can afford to pay by entering the following in the payment arrangement calculator
  • your debt amount
  • frequency of your payments
  • amount per payment or the number of payments
  1. Then, you’ll contact the CRA to set up your payment arrangement by calling this number: 1-866-256-1147.
  2. Finally, you’re ready to start your payment arrangement! Your first step will be making your initial payment. Be sure to make payments on the dates in your payment arrangement and file all future tax returns on time.


For some Canadians, making any payments for their tax debts isn’t currently possible. In that case, it’s essential to contact the CRA right away to discuss your options. 

Usually, this discussion involves determining if any of these options apply to you:

  • deferring your repayment to a later date when you can afford to pay
  • starting or making changes to a payment arrangement
  • discussing other ways to resolve your debt

Among those other ways to resolve your debt could include insolvency or bankruptcy. For many Canadians, this is the best option for a brighter financial future. 

(We also cover more considerations for filing for bankruptcy in Alberta in this post)

Insolvency or bankruptcy and tax payment plans

If you have found yourself in a position where you cannot pay off your mounting debts (including taxes owed), it may be time to consider declaring personal bankruptcy in Edmonton. Declaring personal bankruptcy is one of the available debt relief solutions to help clear your debts and give you the fresh financial start you need.

But keep in mind, not everyone qualifies for bankruptcy in Canada.

According to the Bankruptcy and Insolvency Act, there are general qualifications that you must meet to be eligible for bankruptcy.

  • You must be a Canadian resident.
  • You must be unable to pay your bills when they come due
  • Your balance owing must be more than $1,000

If these qualifications apply to you and you’re interested in exploring bankruptcy for your tax payment plan, we are here to help. The professional and compassionate team at Fox-Miles & Associates is here to help.

Click here to learn more about insolvency, bankruptcy, and credit counselling services and schedule a free consultation. 

Did you learn a lot about tax payment plans and bankruptcy in this post?

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