Have you recently checked your bank statement and noticed a transaction labelled as a Canada RIT deposit or ‘RIT/RIF'? Don't worry; this isn't a cause for alarm. The Canada RIT deposit is just one of several payments that occasionally show up on some Canadians' bank statements. It's a tax refund made by the Canada Revenue Agency (CRA) to eligible individuals as part of different government-sponsored benefit programs.
Read on to learn what the Canada RIT deposits are when they're likely to appear in your bank account, and what you should do if you receive one unexpectedly.
What Is The Canada RIT Deposit?
Canada RIT stands for Canada Refund Income Tax and is a direct deposit from the Canada Revenue Agency (CRA) to eligible taxpaying Canadians. In other words, the Canada RIT deposit payments represent tax refunds from the CRA.
Normally, you will receive the direct deposit payments shortly after you have filed your income tax returns for the year. However, you may also receive them at some point within the year, such as if and when there is a reassessment of your taxes.
The amount you may receive for the tax refund depends on how much taxes you paid for the previous year.
Deposit payments made into your bank account under the code ‘RIT/RIF' are the same as ‘Canada RIT' deposit codes. Both represent the same deposit payments and are sometimes used interchangeably.
Canada RIT Deposit Payments 2022
The Canada Refund Income Tax deposit payments do not have any specific dates. The payments are usually made during the tax season after the CRA has assessed or reassessed your tax returns.
Canadians are generally expected to file their income tax and benefit returns by April 30 of each year. For this year, however, the deadline for filing your income tax returns for 2022 is May 2, 2022.
If you are self-employed, you are expected to file your tax returns by June 15.
The CRA processes your tax refunds within two weeks if you file your tax returns electronically. This means you may receive your Canada RIT deposit payments within two weeks of filing your tax returns.
However, if you file your tax returns by mail, your tax refund may be paid within as many as eight weeks.
In case of reassessments of your tax returns by the CRA within the year, you may receive your payments even later.
Who Can Receive The Canada RIT Deposit?
If you are a taxpaying Canadian citizen or own a business in Canada and pay your taxes regularly, you may be eligible for a tax refund. Canadian individuals and companies may receive a tax refund as long as they file their income tax and benefit returns every year.
Other factors that may qualify you for a tax refund are:
- Your income for the previous tax year.
- The tax credits you're eligible for.
- The number of tax deductions you're eligible for.
For example, in 2016, many small businesses received the Small Business Job Credit under the Canada RIT caption. The job credit was aimed at reducing the Employment Insurance (EI) premiums paid by businesses.
Some recipients of the Climate Action Incentive (CAI) received their payments as Canada RIT deposits as well.
How Much Can You Receive For Canada RIT?
The amount you may be eligible to receive as a tax refund or a Canada RIT deposit is not fixed and can range from a couple of hundred dollars to a few thousand dollars.
In 2022, over 15 million Canadians each received a tax refund averaging $1,998.
The amount you receive is simply the overpaid balance of your taxes.
When the CRA reviews or reassesses your income tax returns, depending on your income for the previous year and how much you ultimately paid for taxes, you may receive a tax refund if you overpaid.
How To Confirm Your Payments
When you see a Canada RIT deposit payment reflected in your bank account, the first thing you should do is confirm the purpose or reason for the deposit.
You should start by confirming if you filed your tax returns. If you haven't, you should do that as soon as possible.
Your best and safest bet is to use the CRA My Account to confirm the payment. The CRA My Account is an excellent service for taxpaying Canadians to get information on their filed taxes, benefits, Notices Of Assessment (NOA), notices of reassessment, and many other services.
All you have to do is log into your CRA My Account, navigate to the messages section and check for any messages, emails, or notifications from the CRA.
If there are no notifications or correspondence from the CRA concerning the Canada RIT deposit, contact the CRA immediately at 1-800-959-8281. In this case, the deposit is probably a mistake, and you'll be required to pay it back sooner or later, so it's best to play it safe and notify the CRA before you mistakenly spend money that isn't yours.
If notifications confirm that the deposit is for you, you're free to spend the money however you want.
What Should You Do With Your Canada RIT Deposit?
Although many see Canada RIT Deposits as windfalls and are immediately tempted to splurge, it's best to avoid this. Here are some ideas on how best to use your Canada RIT deposit:
- Invest it in a long-term asset that will contribute to your financial goals and help you acquire financial security. For example, you could put it into a retirement fund or invest in an annuity if you're not into stocks and bonds.
- You can use your Canada RIT deposit to fund your emergency savings account.
- You can also put your Canada RIT payment in a high-interest savings account and watch your money increase over time. Many banks offer high-yield saving accounts with good rates. Just choose one that suits your needs and use it to save your Canada RIT payments.
- Save it for your children's college education. You can do this using a RESP account. Amounts paid into the RESP account are increased to a certain amount by the government.
- You can also use your Canada RIT deposit payments to invest in stocks and bonds. Simply open an investment account, either a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA), or a non-registered personal account, and use low-cost ETFs to invest in a large number of stocks and bonds.
Other options include making a down payment on your debts and mortgage and setting up a life insurance premium account.
How To Apply For Direct Deposit
The Canada RIT payments are made by direct deposit. If you are not signed up for the direct deposit, you can sign up for direct deposit using any of the following ways:
Through Financial institutions
You can sign up for direct deposit through any Canadian financial institution, including banks, credit unions, and trust companies.
Through CRA My Account
You can also sign up for direct deposit using your CRA My Account on the CRA website.
You can also sign up for direct deposit by calling the CRA at 1-800-959-8281. To sign up, you will need to provide your:
- Full name
- Social Insurance Number (SIN)
- Current address, including postal code
- Date of birth
- Most recent income tax and benefit return as well as information on the most recent payments made to you by the CRA, if any
- Banking information
Canada RIT: Is It Taxable?
The Canada RIT deposit payments are not taxable. You are free to spend the money, invest it or do whatever you want with it without fear of taxes.
You also do not have to include it as taxable income when filing your tax returns for the year since it's technically your overpaid tax balance.
Other Government Deposits
Other deposits made by the CRA to eligible individuals aside from the Canada RIT include:
The Canada Pro deposit payments are made by the CRA for child and family benefits programs in Ontario and Alberta.
If you live in Ontario, the monthly payments are made for the Ontario Trillium Benefit (OTB).
Albertans can also get their quarterly Alberta Child and Family Benefit (ACFB) payments with the Canada Pro caption.
Monthly Ontario Trillium Benefit payments or deposits are made for beneficiaries with a total benefit payment amount of $360 or more. Otherwise, the Canada Pro deposit is paid in one lump sum in July.
Your Ontario Trillium Benefit (OTB) monthly benefit is calculated depending on your net income for the previous year and the amount you are entitled to, which is computed by the CRA every July.
The Alberta Child and Family Benefit (ACFB) amount you may receive depends on your income, the number of children you have, and if you have filed your income tax returns.
Canada FPT Deposit
Another common deposit code is the Canada FPT, which stands for Canada “Fed-Prov-Terr.” The deposit covers several provincial and territorial benefit programs which you can be eligible for, including any of the following programs:
- Canada Child Benefit (CCB)
- Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- Some provincial and territorial benefit programs like the British Columbia Climate Action Tax Credit (BCCATC), the Ontario Senior Homeowners' Property Tax Grant, and others.
Canada Fed is a caption that references payments made by the CRA to eligible individuals for some benefit programs sponsored by the federal government. These benefits programs include the GST/HST credit, the Canada Workers Benefit (CWB), and the Canada Child Benefit (CCB).
Benefit payments made with this and the abovementioned captions are non-taxable.
Canada RIT Deposit FAQs
What does Canada RIT mean in my bank account?
Canada RIT on your bank account means that you have received a tax refund deposit from the CRA.
Why did I get a Canada RIT deposit?
You most likely got the Canada RIT deposit because you overpaid taxes when you filed your tax returns for the year. Therefore, the CRA assessed your tax returns and paid you a refund of the balance of your overpaid taxes. You may also have received a tax refund due to a reassessment of your tax returns.
That said, it is possible to have received a Canada RIT deposit by mistake. In this case, you'll have to return the amount to the CRA eventually.
What does Canada RIT stand for?
Canada RIT stands for Reform Income Tax. It may also be used interchangeably with RIT/RIF.
Is Canada RIT taxable?
No, the Canada RIT is a non-taxable tax refund payment. You do not have to include it as taxable income when filing your tax returns, and you are free to spend the money however you want.
The Canada RIT deposit or RIT/RIF deposit payment is a non-taxable tax refund issued by the CRA to eligible individuals. The tax refund is the balance of your overpaid taxes. You may receive a tax refund within two weeks of filing your income tax returns or at any other time within the year when the CRA reassesses your tax returns.
Though payments are usually merited, they may also reach your account by mistake, in which case you'll have to pay it back to the CRA. Therefore, you should always confirm the payments received with the CRA to ensure that the money is yours so that you can spend it however you want.