Falling behind on filing taxes happens more often than most people think. Whether due to financial hardship, health issues, confusion about the tax system, or procrastination, many Canadians find themselves needing to file multiple years of back taxes. Fortunately, the Canada Revenue Agency (CRA) has established processes to help taxpayers catch up—but it’s important to understand what to expect once you begin the process.
This guide covers everything you need to know about filing multiple years of back taxes in Canada, including CRA’s approach, common consequences, relief options, and how to avoid further trouble.
1. CRA’s Perspective on Unfiled Returns
The CRA takes tax compliance seriously. Every Canadian resident is required to file an income tax return annually if they owe taxes or want to claim benefits. If you haven’t filed in several years, CRA may assume you owe taxes—and initiate collection or enforcement actions.
However, CRA also offers programs to help taxpayers voluntarily come forward without facing the harshest penalties. The key is to act before CRA contacts you.
2. What Triggers CRA Action?
If you’ve failed to file taxes for several years, here’s what could happen:
- CRA warning letters: Notices reminding you to file or warning of further action.
- Notional assessments: CRA may estimate your taxes owing and assess your account without your input—often overestimating to their benefit.
- Interest and penalties: These start accumulating from the original due date of each return.
- Collections action: CRA may garnish wages, freeze bank accounts, or issue liens if balances are unpaid and returns are unfiled.
CRA rarely ignores multiple years of unfiled returns. The longer you wait, the more difficult and expensive it becomes.
3. How Far Back Do You Need to File?
The CRA generally expects taxpayers to file all unfiled years. There is no formal statute of limitations on filing. That said:
- You can file up to 10 years of returns and still receive refunds or retroactive credits (e.g., in 2025, you can get refunds for 2015 and later).
- You can file even older returns to fulfill your filing obligation, but refunds or credits may be forfeited.
4. Penalties and Interest You Might Face
If you owe taxes on the late-filed returns, CRA will impose penalties:
- Late filing penalty: 5% of the balance owing, plus 1% for each full month late (up to 12 months).
- Repeated failure: If you’ve filed late in the past 3 years, the penalty jumps to 10% plus 2% per month (up to 20 months).
- Interest: Daily compound interest is charged on the unpaid balance, including penalties.
Filing even when you can’t pay avoids the late-filing penalty—so it’s better to file on time and make payment arrangements later.
5. CRA’s Voluntary Disclosures Program (VDP)
If you come forward before CRA contacts you, you may qualify for the Voluntary Disclosures Program. This program offers:
- Penalty relief (partial or full)
- Interest relief (sometimes)
- No prosecution for failure to file or tax evasion
To be eligible, your disclosure must:
- Be voluntary (filed before CRA takes action)
- Be complete (include all unfiled years and full income disclosure)
- Involve at least one return more than one year overdue
Applications must be submitted through Form RC199 and can be done through CRA’s MyAccount or by mail.
6. Step-by-Step Guide to Filing Multiple Years
- Access CRA MyAccount: Log in and check which years are unfiled. You can also retrieve tax slips from past years under “Tax Information Slips.”
- Download year-specific tax packages: Each year must be filed using its own forms and tax brackets. Get these from the CRA website.
- Prepare each return individually: Use tax software or a tax preparer to avoid mistakes. Ensure you include all income sources and eligible deductions.
- Submit by EFILE or mail: Most recent returns (last 4–5 years) can be EFILED. Older ones must be printed and mailed to the designated tax centre.
- Set up payment arrangements: If you owe taxes, contact CRA to create an installment plan. Avoid ignoring the balance owed—it leads to collection enforcement.
7. What If You Can’t Pay the Full Amount?
CRA understands that large back balances can be hard to pay. You can:
- Set up a payment arrangement by calling CRA at 1-888-863-8657
- Request taxpayer relief for interest and penalties using Form RC4288
- Explore financial hardship relief if you’re unable to pay due to low income or severe health conditions
8. Benefits of Becoming Compliant
By catching up on back taxes, you can:
- Resume receiving benefits (GST/HST credit, Canada Child Benefit, etc.)
- Avoid further interest, penalties, or collections
- Rebuild your relationship with the CRA
- Access mortgage or loan applications that require proof of tax filings
Many taxpayers also discover they’re owed refunds or missed credits like the Disability Tax Credit, RRSP deductions, or tuition credits—making it even more worthwhile to file.
9. When to Use a Tax Professional
If your tax situation is complex, involves self-employment, rental income, foreign assets, or if you’re nervous about penalties, consult a tax professional. They can:
- Help file accurate, compliant returns
- Negotiate with CRA on your behalf
- Determine if you qualify for relief programs
- Ensure no double-reporting across years
10. Final Thoughts
Filing multiple years of back taxes with the CRA may seem daunting, but it’s manageable with the right approach. Acting proactively before CRA intervenes can save you from severe penalties and enforcement actions. Even if you can’t pay in full, it’s far better to file and make arrangements than to ignore the problem.
Start by gathering documents, reviewing your CRA account, and using official tools and support services. With clarity, organization, and assistance where needed, you can regain control of your tax situation and move forward confidently.
