File the Returns After Death — Montreal CPA Firm Near You: How to Complete, Label, Submit, and Pay Final, Optional T1, and T3 Estate Returns

Once you understand what income to report and which deductions and credits to claim after someone dies, the next step is turning that plan into properly completed and filed tax returns. This step is more technical than it looks: you must choose the correct return packages, label each return accurately, mail them to the correct tax centre, and ensure any balance owing is paid to the right account. You must also handle the estate’s T3 Trust Return separately and coordinate all payments made on behalf of the deceased and the estate.

This guide explains how to complete and submit the Final Return, optional T1 returns, and the T3 Trust Income Tax and Information Return. It also covers how to label the returns, how to file them (including EFILE rules), how to pay balances owing, and how to deal with uncashed CRA cheques for the person who died.

T1 Income Tax and Benefit Returns: Final and Optional T1 Returns

Final Return: Which Package to Use

The Final T1 Income Tax and Benefit Return is the primary return you must file for the person who died. It reports all income from January 1 of the year of death up to the date of death, plus gains triggered by deemed dispositions at death.

To prepare it, you must use:

• The T1 Income Tax Package for the year the person died, and

• The package for the province or territory where the person was living at the time of death.

If the CRA has not yet released the income tax package for the year of death (for example, if death occurs early in a new year), you:

• Use the most recent T1 Income Tax package available, and

• Clearly write the correct tax year you are filing for in the top right corner of page 1.

The CRA will assess the return using the applicable rules for that year and you can request a reassessment if needed once final rules are confirmed.

Optional T1 Returns: Same Package, Different Label

If you are filing one or more optional T1 returns—for Rights or Things, for a Partner or Proprietor, or for Income from a Graduated Rate Estate—you use the same T1 package as for the Final Return. However:

• Each optional return must be separate—one return per optional category.

• You must clearly indicate on each return which optional return it is.

The optional T1 returns are:

• Return for Rights or Things

• Return for a Partner or Proprietor

• Return for Income from a Graduated Rate Estate

Income that is eligible for an optional return is reported there instead of on the Final Return, and related deductions and credits may be claimed accordingly.

Labelling the Tax Returns Correctly

CRA relies heavily on the way returns are labeled and identified. Mislabeling can cause processing delays, misapplied assessments, or confusion about which return is which.

Before you submit the Final Return and any optional T1 returns, make sure that, in the identification and other information area of each return, you:

• Write the type of return in the upper right corner of the first page

  • Examples: “Final Return,” “Return for Rights or Things,” “Return for Partner or Proprietor,” “Return for Income from a GRE.”

• Enter the identification information for the person who died in all relevant boxes

• Write “The Estate of the Late” before the deceased’s name

• Use your address as the mailing address so CRA correspondence goes to the representative

• Make sure the province or territory of residence is the one where the person lived on the date of death

• Tick the box for the deceased’s marital status at the time of death

• Enter the date of death on the designated line

On the last page of the return:

• Sign your name in the space provided, and

• Indicate your title (for example “Executor,” “Liquidator,” or “Administrator”).

This confirms to the CRA that you are acting as the legal representative and authorizes processing of the return.

T3 Trust Income Tax and Information Return: For the Estate

After death, the person’s property, assets, and liabilities form their estate. As a trust for tax purposes, the estate may need its own tax return to report income earned after death, such as:

• Investment income

• Rental income

• Business income

• Capital gains realized when the estate sells or distributes assets

• Certain death benefits received by the estate

To report this post-death estate income, you must use:

• Form T3RET — T3 Trust Income Tax and Information Return.

This form is separate from the T1 returns and has its own account number and filing deadlines. In many cases, you will file both:

• A Final T1 return for the deceased, and

• A T3 return for the estate.

How to Submit the Returns

Rules differ depending on whether you are filing T1 returns for the deceased or a T3 return for the estate.

Final Return and Optional T1 Returns

If you are filing as the legal representative:

• You must print, sign, and mail the returns to the appropriate CRA tax centre.

• Online tax software cannot currently be used to submit the Final Return or optional T1 returns directly. Even if software helps you prepare the forms, you still need to send the signed paper returns by mail.

• EFILE (electronic transmission of T1 returns) is only available to registered and authorized tax preparation service providers, such as CPA firms and other professional tax preparers.

This means that, as an executor or liquidator filing personally, you should plan to submit paper returns by mail.

T3 Trust Income Tax and Information Return

For the estate’s T3 return, there are two main submission options:

• Online (EFILE):

  • Approved tax preparation service providers can file the T3 Return electronically through EFILE.

  • A trust account number must be obtained before the return is filed. The provider will reference this account when submitting via EFILE.

• By mail:

  • You may also file a T3 return by mailing Form T3RET and supporting schedules to a CRA trust processing tax centre.

  • The trust account number is used to identify the estate in all correspondence and payments.

Professional assistance is often used for T3 returns because of their complexity and interaction with distributions to beneficiaries.

Paying Any Balance Owing

After you file the Final Return, any optional T1 returns, and the T3 return, one or more of them may show a balance owing. As legal representative, you must ensure this is paid.

When you make a payment to the CRA, it is critical to indicate the correct account:

• For T1 returns, including the Final Return and any optional T1 returns:

  • Use the social insurance number (SIN) of the person who died as the account identifier.

• For T3 returns for the estate:

  • Use the T3 trust account number for the estate.

This distinction is important. Mixing these up can cause payments to be misapplied, leaving balances apparently unpaid and delaying estate closure or clearance certificates.

If you need to confirm that a payment has been applied correctly, or if a payment is missing from CRA’s records, you must follow CRA’s Confirm a Payment process, which may involve checking online, contacting CRA, or providing proof of payment.

Keep in mind that:

• The due date for paying balances owing depends on the type of return (T1 vs T3) and the date of death.

• Filing and payment deadlines are different and are explained in detail in the filing and payment due dates guidance.

Uncashed CRA Cheques for the Deceased

If the person who died had any uncashed cheques from the CRA, those funds may still be available and can:

• Be used to offset debts owing to the CRA, or

• Be reissued to the estate as a replacement payment.

As legal representative, you can:

• Verify whether uncashed cheques exist, and

• Request that they be applied against existing balances or reissued to the estate.

This step can help reduce how much cash the estate needs to pay out of pocket.

Practical Tips for Legal Representatives

When you are ready to file:

1. Confirm all returns required: Final T1, optional T1, T3, and any prior-year T1s.

2. Gather and review all slips: T4, T4A, T4A(P), T4RSP, T3, T5, etc.

3. Prepare and label each return: clearly indicate the type of return on page 1 and “The Estate of the Late” before the name.

4. Verify addresses and dates: ensure the province of residence at death and date of death are correct.

5. Sign as legal representative: executor, liquidator, or administrator.

6. Mail T1 returns and keep copies of everything submitted.

7. File the T3 return by mail or through an authorized EFILE provider.

8. Make payments with the correct identifiers (SIN for T1, T3 account for estate trust).

9. Check for uncashed cheques and apply or reissue them as needed.

10. Once all returns are assessed and balances are paid, move toward obtaining a clearance certificate before distributing estate assets.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.

If you are an executor, liquidator, or administrator responsible for filing returns after a death, Mackisen can prepare, label, file, and reconcile all T1 and T3 returns for you—and guide you safely through to the clearance certificate, so you can distribute the estate with confidence.