Filing and Payment Due Dates After Death — Montreal CPA Firm Near You: Deadlines, Penalties, Instalments, and Estate Tax Planning

When someone dies, the tax calendar does not stop. Different returns for the deceased and their estate all have their own filing and payment deadlines. If these returns are filed late and there is a balance owing, the CRA will add late-filing penalties and daily interest. For a legal representative already managing grief, family dynamics, and estate administration, missing a date can create avoidable financial damage for the estate and, in some cases, personal liability.

This guide explains every key due date you must know when filing returns for someone who has died: the Final T1 return, optional T1 returns, prior-year returns, T3 estate returns, and instalments. It also explains how weekends and holidays affect deadlines, what penalties apply, when you can ask for relief, and how an election to defer tax works for certain estate situations.

Final Return: Core Deadlines

The Final T1 Income Tax and Benefit Return reports all income earned by the deceased from January 1 of the year of death up to the date of death, as well as increases in the fair market value of their property and investments that are triggered at death.

The filing and payment deadlines depend on when the person died:

• If the death occurred between January 1 and October 31, the deadline to file the Final Return and pay the balance is April 30 of the following year.

• If the death occurred between November 1 and December 31, the deadline is six months after the date of death, on the same calendar day.

If the deceased or their spouse or common-law partner carried on a business, the filing deadline may be later, but the payment deadline often remains tied to the standard dates. In all cases, interest starts on unpaid balances the day after the payment due date.

In many estates, the Final Return is the primary return and must be treated as the anchor for all other filings.

Optional T1 Returns: Extra Returns, Extra Planning Opportunities

In addition to the Final Return, the legal representative may be able to file up to three optional T1 returns. These are not mandatory, but they can reduce or eliminate tax by spreading certain types of income over multiple returns and allowing some deductions and credits to be claimed more than once or split strategically.

The three main optional returns are:

• Return for Rights or Things

• Return for a Partner or Proprietor

• Return for Income from a Graduated Rate Estate

Each has its own filing rules, but the core idea is the same: eligible income is reported on the optional return instead of on the Final Return, which may lower the overall tax bill for the deceased.

Return for Rights or Things

This optional return is used for specific amounts that were earned before death but not received by the deceased. If the person had lived, these amounts would have been included in their regular T1 return. These rights or things do not include capital gains; they are typically items such as unpaid bonuses, certain retroactive pay, or amounts that had accrued but were not yet paid.

The filing deadline is the later of:

• One year after the date of death, or

• Ninety days after the CRA issues a Notice of Assessment or Reassessment for the Final Return.

However, any balance owing on this return is generally due on the same date as the Final Return, usually April 30 of the year following the year of death, unless the law allows a deferral with security. This timing creates planning opportunities but also a risk if cash flow is tight.

Return for a Partner or Proprietor

If the deceased was a sole proprietor or a partner, and the end of the business fiscal year is not December 31, income earned between the end of that fiscal year and the date of death can be reported on a separate optional return for a partner or proprietor.

This return follows the same filing and payment deadlines as the Final Return, though the filing deadline may be extended if the deceased or their spouse or common-law partner was self-employed. The business income must be reconciled using the appropriate CRA form so that it is correctly divided between the Final Return and this optional return.

Return for Income from a Graduated Rate Estate

If the deceased was receiving income from another person’s Graduated Rate Estate (GRE) and that income was received between the fiscal year-end of the GRE and the date of death, it may be reported on a separate optional return.

This return also follows the same filing and payment due dates as the Final Return. Using it correctly can reduce tax by separating GRE income from other sources and allowing strategic use of credits and deductions.

Previous-Year Returns: Catching Up Before the Estate Moves On

If the person died before filing their T1 return for a prior year that was already due, that return must still be filed. The due dates for those older returns do not change just because death occurred, and interest and penalties may already be accumulating.

There is one important exception: if a person dies early in the new tax year (for example, in early 2025) on or before the filing deadline for their 2024 return and they had not yet filed it, the due date for that 2024 return becomes six months after the date of death. The same extended filing date applies to the surviving spouse or common-law partner who lived with the deceased, but any balance owing on the spouse’s return must still be paid by April 30 to avoid interest.

For all other overdue years, deadlines remain unchanged. The legal representative must catch up those prior-year filings as part of settling the estate.

Instalments After Death

If the person who died was making instalment payments for their income tax, no new instalments are required after the date of death. The only instalments that must still be paid are those that were due but unpaid before death.

The Final Return will reconcile actual tax payable with instalments already paid, and any deficiency or overpayment will appear as a balance owing or refund on that return.

T3 Trust Returns: Deadlines for the Estate Itself

Once a person dies, their belongings, property, assets, and liabilities form their estate. In many cases, the estate continues to earn income—interest, dividends, rental income—or receives amounts such as employer death benefits. When the estate earns post-death income or realizes capital gains, a T3 Trust Income Tax and Information Return is usually required.

The basic deadline for filing a T3 return and paying the balance owing is:

• Ninety days after the trust’s tax year-end or wind-up date.

For a Graduated Rate Estate (GRE), the legal representative can choose the estate’s first tax year-end on any date up to one year after the date of death. The year-end chosen must be indicated on the first T3 return. In the year the GRE is wound up, its final tax year typically ends on the date the estate’s property is fully distributed.

For testamentary trusts that are not GREs, the tax year-end is December 31, including in the year the trust is wound up. That means the ninety-day filing deadline will generally fall at the end of March.

Choosing a year-end other than the anniversary of death can affect cash flow, planning opportunities, and administrative workload. It should be decided carefully before filing the first T3 return.

Weekends, Holidays, and “On-Time” Filing

When a due date falls on a Saturday, Sunday, or a public holiday recognized by the CRA, a return is considered filed on time if the CRA receives it, or if it is postmarked, on or before the next business day.

Similarly, a payment is considered on time if it reaches the CRA on the first business day following the usual due date. This rule can provide a small cushion around statutory holidays and weekend dates, but it should not be relied on in place of proper planning.

Filing Early When Forms Are Not Available

Sometimes, the official return package for the year of death is not yet available, especially when death occurs early in a new calendar year. In such cases, the legal representative can file early by using a blank return from the most recent available year.

On the first page of the return, the correct tax year must be clearly written at the top. The CRA will assess the return using the latest year’s rules, and a reassessment can be requested later when the final tax rules for that year are confirmed. Filing early in this way allows the estate to move forward rather than waiting for forms to be published.

Late-Filing Penalties and Interest

If a return is filed late and there is a balance owing, the CRA will charge a late-filing penalty. For T1 returns, the standard penalty is calculated as a percentage of the unpaid tax plus an additional amount for each full month the return is late, up to a specified maximum number of months. The penalty can be higher if a late-filing penalty was applied in any of the three previous tax years. On top of this, the CRA charges compound daily interest on both the unpaid tax and the penalty.

Even if the estate cannot pay the balance in full by the due date, filing the return on time avoids the late-filing penalty and limits the cost to interest only.

For T3 returns, a separate late-filing penalty structure applies. The trust can face a daily penalty even when no tax is owing. The penalty increases with each day the return is overdue, subject to minimum and maximum amounts. On top of that, interest accrues on any unpaid tax.

In all cases, the CRA charges daily compound interest from the day after the due date until the balance is paid in full.

Election to Defer Payment of Tax

In certain estate situations, the legal representative can elect to delay paying part of the income tax owing. This may apply, for example, to amounts reported on a Return for Rights or Things or to tax triggered by the deemed disposition of capital property at death.

To defer payment, the representative must provide acceptable security for the amount owed and must file the appropriate election form with the CRA. Interest will still apply on the unpaid amount from the day after the normal due date until payment is made in full, but the principal does not need to be paid immediately.

This deferral can help estates that are asset-rich but cash-poor manage liquidity while waiting to sell or refinance assets. However, it needs careful planning because interest continues to accumulate.

Relief: Cancelling or Waiving Penalties and Interest

In some circumstances, the CRA may cancel or waive penalties or interest when late filing or late payment happened due to situations beyond the legal representative’s control. Serious illness, natural disasters, processing delays, and other exceptional events may qualify. The representative can submit a formal request asking the CRA to reconsider penalties and interest.

Although this does not erase the underlying tax owing, it can significantly reduce the estate’s burden and help close the file more quickly.

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 acting as a legal representative after a death, Mackisen can help you map every deadline, file every required return on time, manage elections and deferrals, and guide you safely to a clearance certificate before you distribute the estate.