Canada RIT: Everything You Should Know About the CRA Deposit
Received any surprises lately?
I am guessing you saw a deposit in your bank account with “Canada RIT” or “RIT/FIF” as the description. Surprises like this do not come all the time, especially from the source of the Canada RIT deposit.
You could get a bonus from your employer or cash gifts from family, friends, or a loved one, but getting a deposit from the government is almost unheard of. It is a rare scenario to get money deposited into your account from an unsolicited source. In such scenarios, one is always advised to report to the bank for investigation and counsel on usage.
Deposits from the government are among monies that one would need to thread caution around. Even though it is no fault of yours that the money made its way into your bank account, spending it could land you in unprecedented government issues.
If you have received the Canada RIT deposit, I believe you already know it is from the government. In the case of this deposit, you should not be skeptical about making use of the money. The money did not pop into your account by mistake, and no one expects you to make a refund when you receive the deposit.
In short, the Canada RIT or RIT/FIT deposit is a tax refund from the Canada Revenue Authority (CRA). One receives this deposit when the CRA assesses his or her tax payment and discovers the charge was more than the required amount.
Receiving the RIT/FIF or Canada RIT deposit does not put you in any form of disadvantage; instead, it is a show of commitment on the path of the Canadian government in ensuring that the tax payment system in the country is as transparent as possible. Canadians should be excited about this as not so many governments in the world today would be this transparent when it comes to tax funds.
In this article, I have provided a detailed breakdown of what the Canada RIT is about, what to do with the RIT deposit, who is eligible for the deposit, and other essential FAQs concerning the deposit.
Brief Summary on what is Canada RIT Deposit?
The Canada RIT deposit is a direct deposit sent by the Canada Revenue Authority (CRA). It stands for Canada Refund Income and as the name suggests, the Canada RIT, also known as the RIT/FIF deposit, is a tax refund from the CRA.
Taxpayers can expect to get the deposit sent to their account just after they file their taxes, but according to the Canada Revenue Authority (CRA), the deposit can be sent at any time in the year.
Receiving the Canada RIT deposit would mean that the taxes you have filed were reassessed. The deposit comes with a note of reassessment, which is sent to the recipient’s email address or via their CRA online account. The Canada Revenue Authority (CRA) reassesses tax returns three years after the initial notice of assessment.
What to Do With the Canada RIT Deposit?
First, I will like you to eliminate the thought in your head that makes you think the RIT deposit refund comes with many zeros. You are probably thinking since it is the government making the deposit, you should see six or seven figures in your bank account. The truth is, the deposit may be substantial but do not expect much.
Secondly, aside from the reason for the deposit that I explained in my introduction, it is a prudent move to confirm why you received the deposit first, and the best way to do that is to contact the Canada Revenue Authority (CRA).
The fastest, seamless way to get across to the CRA and be sure why you received the deposit is from the CRA My Account dashboard. All you need to do is, log on to your My Account with CRA and look for a correspondence that should be sent explaining why you received the deposit.
The CRA My Account is designed to service Canadian tax-filers by providing benefits, information about taxes filed, a notice of assessment (NOA), a notice of reassessment (NOR), and other tax-related services. When you log in successfully, you will find the correspondence from CRA in the message section.
If you do not find the correspondence from the CRA, the next line of action to take is to place a call to the authority. That way, you can get direct answers from a representative on why the deposit was made.
Whatever is the reason for the deposit, you are not returning the money to the government. Since the government will not be asking you for a refund, after all, it is the refund of your filed tax, and you may be at a loss for what to use the money to do.
You were not expecting it, and there probably was no plan for the money. I would use the money to serve me a treat. There is nothing bad in visiting an eatery or restaurant and trying out some new recipe, probably from an Italian chef.
My mom would frown at the idea, though. As an economist, she could list a thousand and one things she would do with the money that she did not expect to come. It is not a bad idea to use the RIT deposit for lofty ventures or put the money to use towards your financial goals.
You can use it to pay off your debts, top up your emergency fund, invest in your retirement plan, pay your insurance deductible, get books, subscribe for professional membership, and much more.
No one needs to decide what you do with your money. You are in the best position to determine how best to use the Canada RIT deposit sent to you.
Do Businesses get the Canada RIT Deposit?
As a business owner who pays tax under the auspices of your business, you would be wondering if the refund income tax would come your way. Well, it would if the CRA reassesses your tax and decides you should get a tax refund.
The bottom line is, both businesses, organizations, and individuals are eligible to get the Canada RIT deposit. Anyone and everyone that pays tax is eligible to receive the deposit.
An interesting instance is in the Small Business Job Credit the government gave to small businesses in 2016. The credit had the caption “Canada RIT,” suggesting it was a credit to small businesses after assessing the tax filed. Although, the actual intent behind the gesture was to reduce the Employment Insurance (EI) premiums imposed on small businesses.
There are a handful of reasons why the CRA may make deposits to your bank account. This is why I advised that you check your CRA My Account or call the CRA to be sure why you received the deposit.
Do You Pay Tax on Canada RIT Deposit?
As a patriotic citizen, you would want to know if you should pay tax after receiving the RIF/FIF deposit. Well, the Canada RIT is not taxable. That means you do not need to include it as a taxable income when you file your tax.
See it as a gift for being a faithful citizen. After all, only loyal citizens get to receive the deposit.
Answers to FAQs on RIT or RIF/FIF Deposit.
As I promised, I will be providing answers to some of the frequently asked questions making the rounds concerning the CRA RIT deposit. Let’s start from the basics, shall we?
What is Canada RIT Deposit?
RIT stands for Refund Income Tax. Therefore, Canada RIT refers to the Canada Refund Income Tax. It is a deposit sent by the Canada Revenue Authority (CRA) after the reassessment of filed taxes. Receiving a deposit with the description “Canada RIT” or “RIT/FIF” would mean a tax refund.
Where can I get information on the Canada RIT Deposit?
When you receive the deposit from CRA, the very first thing to do is to find out why the CRA deposited in the first place. To do so, you would need to log on to your CRA My Account, access the message section, and locate the correspondence from CRA explaining the deposit.
If there is no correspondence, an alternative is to make a phone call to the CRA and have a representative from the authority explain why the deposit was made.
What is CRA?
CRA is an acronym for the Canada Revenue Authority, the government agency in Canada that oversees all that relates to taxes, assessment, reassessment, and taxpayers.
What is the CRA Reassessment Period?
Reassessment is one of the core functions of the Canada Revenue Authority (CRA). They conduct reassessment on taxpayers’ accounts within three years. It means that your tax filing will be reassessed within three years of your original notice of assessment.
Should I Add the Canada RIT Deposit to my Tax Returns?
No. The RIT deposit sent to your account is a refund of the tax you paid in the past. Imagine when you pay for a good and mistakenly give the buyer more than you are supposed to. If the seller is honest, they will provide you with a refund.
This is what happened when you received the Canada RIT deposit. You filed more tax than you were supposed to, and the government sincerely gave you a refund.
Now you know why you received the Canada RIT deposit. Remember to confirm the purpose for the deposit from your CRA My Account before making use of it. leave a comment below if you learned from this article.