CRA payment arrangement: how to set up a payment plan (and what CRA will ask)

CRA payment arrangement: how to set up a payment plan (and what CRA will ask)

If you owe the CRA and you can't pay it all right now, you aren't alone. The goal is to get organized fast, make a realistic plan, and stop the situation from getting louder.

Step 1: File first (even if you can't pay)

Filing on time (or filing as soon as you can) matters because penalties are tied to late filing when you have a balance owing, and interest can keep building when amounts are unpaid. Getting the return(s) filed gives you a real number to work with and usually reduces the “unknown” anxiety.

Step 2: Confirm what you actually owe

Before you set up payments, gather:

• The amount(s) owing (by year or by program, like personal tax vs GST/HST)

• Any CRA letters with a reference number

• A basic monthly budget: rent or mortgage, utilities, loan payments, groceries, insurance

• Your realistic monthly payment amount

Step 3: Set up a payment arrangement

CRA explains that if you can't pay right away, you can arrange to pay over time, including scheduling payments through CRA online accounts using pre-authorized debit.

A clean approach is:

1. Pick a monthly amount you can actually sustain.

2. Set it up as a scheduled series of payments (PAD) so you aren't relying on memory.

3. Keep making new taxes and filings on time while you pay down the old balance.

Step 4: Do not ignore collections letters

If your letter is from a collections officer, CRA’s guidance is to contact them at the number in the letter as soon as possible.

Common mistakes that make this worse

• Setting payments too high and missing them later.

• Not filing new returns while paying old debt, which can default an arrangement.

• No proof system (no confirmation screenshots, no notes of what you sent).

Quick “what I would do today” checklist

• Pull your CRA balances (or Notices of Assessment)

• List missing years that still need filing

• Decide on a realistic monthly payment amount

• Set up scheduled payments through CRA online services (PAD)

• Put a recurring reminder to check CRA mail and your online account monthly