Tax Refunds — Montreal CPA Firm Near You: How CRA Refunds Work, Why Refunds Get Delayed, and How to Protect Your Money

Tax refunds are one of the most misunderstood areas of Canadian taxation. Most people expect a quick refund after filing their return, but refunds can be delayed, offset, reduced, or reassessed depending on your CRA account history, benefit overpayments, or outstanding debts. With CRA collections activity fully resumed, taxpayers need to understand how refunds are processed, when they can be withheld, how interest works, and how to check refund status safely.

This 4-page professional guide explains everything you need to know about CRA refunds—timelines, delays, debt offsets, instalment transfers, interest rules, and how to monitor your refund through secure CRA tools. Written in a high-authority accounting and tax blogger style, optimized for strong SEO and high conversion, this article empowers taxpayers while positioning Mackisen CPA as the go-to firm for resolving refund issues and CRA delays.

Legal and Regulatory Framework

Under the Income Tax Act, the CRA must issue a Notice of Assessment (NOA) after processing your tax return. If the return shows an overpayment, the CRA issues a refund. However, the CRA is also legally required to apply refunds against existing government debts before paying any remaining amount to the taxpayer.

Refunds may be offset against debts such as:

• CRA tax balances (current or previous years)

• GST/HST debts for sole proprietors or partnerships

• Employment Insurance (EI) overpayments

• Student loan debt

• Social assistance or training allowance overpayments

• Immigration loans

• Family law garnishment orders under the Family Orders and Agreements Enforcement Assistance Act

Because debt offset is mandatory—not optional—refunds can disappear without warning if a taxpayer has unresolved balances.

CRA refund processing also follows strict federal timelines and interest rules. If the CRA delays issuing a refund beyond prescribed limits, daily compound interest must be paid to the taxpayer. Refunds may also be delayed if CRA selects the return for review.

With CRA collections fully resumed, taxpayers experiencing financial hardship due to refund offsets can contact CRA to discuss repayment plans, but CRA cannot override mandatory offsets without formal approval under taxpayer relief provisions.

Key CRA Refund Timelines

The CRA’s processing timelines depend on how you file:

• Online (NETFILE or EFILE): Refund issued within 2 weeks

• Paper return: Refund issued within 8 weeks

• Non-resident return: Refund issued within 16 weeks

These timelines only apply when returns are:

• Filed on or before the deadline

• Filed correctly

• Not selected for additional review

CRA’s processing tools show up-to-date timelines at Check CRA Processing Times.

Delays may occur when a return is:

• Selected for a pre-assessment or post-assessment review

• Missing slips or information

• Flagged by CRA automated risk systems

• Associated with prior compliance issues

• Linked to unfiled GST/HST returns for business owners

• Filed by non-residents during peak periods

When returns undergo review, CRA may request supporting documents such as T4s, receipts, RRSP slips, donation receipts, T2202 tuition forms, or proof of dependants.

Why Your Refund Has Not Arrived

Refund delays or reductions can occur for several reasons.

1. Outstanding CRA Debt

CRA will automatically keep your refund if you owe:

• Personal tax

• Corporate tax (if you are a director or sole proprietor)

• GST/HST filings

• Payroll source deductions (for business owners)

Refunds can be applied against amounts owing even if the taxpayer is on a payment plan.

2. Government Debts Outside CRA

CRA may apply refunds against:

• Student loans

• EI debt

• Immigration loans

• Social assistance overpayments

3. Family Garnishment Orders

Refunds may be intercepted under the Family Orders and Agreements Enforcement Assistance Act.

4. Missing Filings

A refund may be held if the taxpayer:

• Has unfiled GST/HST returns

• Has unfiled payroll remittances

• Has unfiled prior-year personal tax returns

5. Refund Less Than $2

CRA does not issue refunds of $2 or less.

6. Returns Selected for Review

CRA may hold refunds while verifying:

• Tuition credits

• Medical receipts

• Dependant claims

• Support payments

• Childcare amounts

• Employment expenses

• Rental or self-employment income

A review does not mean you are being audited—but it does pause the refund.

Interest on Your Refund

CRA pays daily compound interest on refunds in specific situations. CRA begins calculating interest on the latest of:

• The 30th day after the balance-due date

• The 30th day after the return was filed

• The day you overpaid your taxes

If CRA delays processing through no fault of the taxpayer, interest is owed. The taxpayer must ensure that direct deposit is active to receive interest quickly.

Interest on refunds is taxable in the year received.

How to Check the Status of Your Refund

Before calling CRA, wait:

• 8 weeks after filing (Canada residents)

• 16 weeks after filing (non-residents)

Online: My Account

My Account provides secure access to:

• Refund status

• Assessment results

• Outstanding balances

• Adjustments

• CRA review letters

• Direct deposit information

Taxpayers can register for My Account to see the refund status immediately.

By Phone

CRA offers:

• Agent-assisted support

• Automated telephone updates

However, phone support requires identity verification and is slower during peak season.

For faster results, use My Account whenever possible.

Transfer Your Refund to Your Instalment Account

Taxpayers who make instalments can ask CRA to transfer their refund to their next instalment account.

You can do this by:

• Selecting the option when filing electronically

• Attaching a written note to your paper return

CRA will apply the refund as a payment on the assessment date. This can reduce future instalment requirements and prevent interest on missed instalments.

Important:
CRA cannot transfer your refund to someone else’s account, even if you owe them money privately.

Why CRA Refund Issues Are Commonly Targeted

Refund problems occur frequently because:

• Taxpayers are unaware CRA offsets refunds to pay debt

• Many people have old student loan or EI overpayments

• CRA systems automatically match refunds with debts

• Sole proprietors forget to file GST/HST returns

• Instalment payers do not track overpayments properly

• Non-resident returns take much longer to process

• CRA reviews pause refunds without notice

This can create financial stress, especially during tax season when taxpayers expect money back. Understanding the rules prevents unpleasant surprises.

Mackisen Strategy

Mackisen CPA Montreal assists individuals and businesses by:

• Confirming refund eligibility

• Checking CRA account balances and offsets

• Correcting misapplied refunds

• Setting up direct deposit for faster payments

• Responding to CRA review letters

• Filing missing returns to release held refunds

• Applying for taxpayer relief when CRA delays cause hardship

• Managing non-resident refunds and slow-processing files

• Ensuring instalment transfers are applied properly

We also monitor CRA compliance on your behalf, ensuring refunds are not delayed unnecessarily.

Real Client Experience

A Montreal taxpayer had not received her refund for months. Mackisen discovered CRA offset the refund to an old EI debt from 2012. We arranged a repayment review and structured relief for financial hardship.

A self-employed contractor filed on time but had an outstanding GST/HST return. CRA held the refund until the missing return was filed. We filed the missing return and the client received their refund within days.

A non-resident had been waiting over 20 weeks for a refund. Mackisen contacted CRA’s Non-Resident Processing Centre, resolved missing documentation, and released the refund.

A taxpayer selected “transfer refund to instalments” but CRA applied it incorrectly. We reallocated the payment and ensured the instalment was credited on the correct date.

Common Questions

Why is my refund taking longer than usual?
Likely due to review, debt offsets, or unfiled returns.

Will CRA notify me before using my refund to pay debt?
No. Refund offsets occur automatically.

Can CRA take my refund to pay someone else’s debt?
Only in cases of legal garnishment orders under family law legislation.

Does CRA pay interest on delayed refunds?
Yes, under specific conditions.

Are refunds taxable?
Refunds are not taxable, but refund interest is.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures taxpayers receive their refunds quickly, accurately, and without stress. Whether you are waiting on a refund, experiencing CRA delays, facing debt offsets, or managing non-resident refund timelines, our expert team ensures your return is correct, your account is clean, and your money is not held unnecessarily.

If you want expert support to secure your refund, resolve CRA issues, or prevent delays, Mackisen can guide you every step of the way and protect your tax position year after year.