If you’re reading this, I’m guessing you recently received a deposit in your bank account with “Canada RIT” or “RIT/RIF” as the caption. You’re in the right place if the answer is Yes.
Quick answer: Canada RIT is Canada Refund Income Tax and it is a deposit from the Canada Revenue Authority (CRA).
There are few things more exciting than receiving an unexpected credit from the Canadian government. But before you start spending the money, you should understand what the Canada RIT deposit mean.
In this post, you’ll learn everything you need to know about the deposit and what to do with it.
Let’s get started…
What is Canada RIT Deposit?
Canada RIT refers to Canada Refund Income Tax and it is a direct deposit from Canada Revenue Authority (CRA). As the name suggests, if you received a deposit with the caption, it is a tax refund from CRA.
Usually the deposit will hit your account shortly after you filed your taxes. But they may also come any time of the year.
If you received the Canada RIT deposit at any other time of the year, the most likely reason is a reassessment of the taxes you’ve filed. And you should receive a notice of reassessment in your mail or through your online account with CRA.
Note that CRA can reassess your tax return within 3 years of the date of the initial notice of assessment.
The money isn’t much in most cases. But irrespective of the amount, you should confirm the reason for the credit before you spend it.
What to do if you received Canada RIT?
The first thing you should do after receiving the credit is to confirm what it’s for.
The quickest and easiest way to do this is by logging into your My Account with CRA. The CRA My Account is a great service for every Canadian tax-filer.
You can get information about your benefits, taxes filed, notices of assessment (NOA), notices of reassessment and many more.
Once logged in, check the message section to view any correspondence you have from CRA.
If you still can’t find any message relating to the Canada RIT deposit, then it’s best to place a call to CRA.
What to do with the deposit?
Depending on how much the credit is, you may be wondering what to do with the money.
The money is yours to do as you wish. And you can indulge yourself or upgrade some electronics in your apartment. After all, you were not expecting it.
You should treat the Canada RIT deposit like any other tax refund you receive from CRA. That is, make the most of the money by putting it towards one of your financial goals like:
- Topping up your emergency fund
- Paying down your debts
- Saving for a down payment
- Investing towards retirement
- Making a payment you would have made anyway, for example annual life insurance premium or subscription for a professional membership and so on
Whichever way you choose to use the money, just remember that every dollar counts towards meeting your financial goals.
Who gets Canada RIT?
So who is eligible for Canada RIT?
Both individuals and businesses can get the Canada RIT deposit.
For example, the Small Business Job Credit that was paid to many small businesses in 2016 had the caption. In that instance, the deposit was meant to reduce the Employment Insurance (EI) premiums that businesses had to pay.
Also, a few people have received the payment for the Climate Action Incentive (CAI) in their account with the same caption.
Whatever the reason, your CRA My Account is the easiest an fastest place to check and confirm the payment.
Is Canada RIT Taxable?
Canada RIT is not taxable. It’s a tax refund after all. This means you won’t have to include it as a taxable income when your file your income tax returns.
Canada RIT Dates
There are no specific or scheduled payment dates for Canada RIT. They are usually paid after CRA is done accessing or reassessing your tax returns.
Usually, you can expect your tax refund within 2 weeks of filing your tax returns if you filed electronically. Or up to 8 weeks for paper returns.
How often is Canada RIT Paid?
Since there are no regular payment dates for Canada RIT deposit, you can expect Canada RIT to be paid as a lump sum amount after any CRA assessment. Not monthly, quarterly or annually.
However, you may get it once in a year after filing the normal tax returns, and other times for reassessed tax returns.
How much is Canada RIT?
The amount you receive as Canada RIT can be a small as a few hundred dollars or as high as a few thousands.
It is difficult to say and estimate since it depends on what exactly the refund relates to. For example, if your income tax returns were reassessed for a few years and CRA sends you a refund, the total amount you get as Canada RIT may be material.
Other times, the reassessment will only result in smaller amounts.
What is Canada RIF?
Canada RIF is another term for Canada RIT. If you receive a deposit in your bank account with RIT/RIF as the caption, it is a tax refund from CRA. Like the Canada RIT deposits, check your CRA My Account to confirm the payment or make a call to them.
Canada RIT stands for Canada Refund Income Tax. If you received any credit in your bank account with the caption, it is likely a tax refund.
The quickest way to get details about the credit is through your CRA My Account
The CRA reassessment period is 3 years. That means your tax return can be reassessed within 3 years of the date of your original notice of assessment.
No, the Canada RIT deposit is a refund of taxes you’ve paid in the past. Therefore, it is not taxable and you won’t have to include it in your income tax returns.
So what is Canada RIT in my bank account?
It is a direct deposit from Canada Revenue Authority (CRA) and it’s most likely a tax refund. However, you should log into your account with CRA to confirm the deposit and see if you have a notice of reassessment.
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