Canada RIT deposit is not something you see often in a Canadian bank statement. Whenever it reflects in your bank account, it is essential to know what it is and how it relates to you and your bank account.
Who wouldn’t want to see more money in their bank account, especially a deposit you weren’t expecting. So, if you’ve ever come across a Canada RIT payment in your bank account, you should understand how it works before spending the money.
One thing you should note, however, is that the Canada RIT/RIF deposit is your money.
What is Canada RIT?
Canada RIT is a direct deposit from the Canada Revenue Agency (CRA) as a tax refund. RIT, which is an acronym for Refund Income Tax, is a refund of the taxes you filed from the CRA.
Although this is not what usually shows up when you receive a tax refund, whenever you receive or observe a Canada RIT transaction in your Canadian bank account, it’s most possible for your tax refund.
You can generally receive an RIT deposit after you have filed your tax refund with the Canada Revenue Agency (CRA) or if your taxes were reassessed. If you have set up Direct Deposit for tax refunds with the CRA, the Revenue Agency will credit your Canadian bank account with your tax refund deposit.
The Canada Revenue Agency (CRA) is the Canadian government agency responsible for crediting your bank account with the Refund Income Tax (RIT) and other similar deposits, including the Canada FPT rebate.
How Often Can I Receive the Canada RIT Deposit?
Usually, Canada RIT deposits are paid into your Canadian bank account after filing your annual tax return. The RIT is a tax refund payment from the CRA.
However, there are times when the RIT/RIF payment can come up at any time of the year. This can happen when the CRA conducts a reassessment of the taxes you filed. When this is done, the CRA will issue a Notice of Reassessment to you by mail or online via the CRA My Account portal, indicating that you are eligible for tax refunds.
How to Confirm your Canada RIT Deposit
When you receive or observe a Canada RIT transaction in your bank account, the first thing to do is confirm the payment reason. There are different ways to ascertain the RIT transaction on your account.
- Log in to your CRA My Account portal with your preferred login method (user ID and password or sign-in partners). Check your mail/message section for any message or notification from the CRA relating to the Canada RIT deposit. It is often recommended for all taxpayers to set up a CRA My Account profile if you don’t already have one. The CRA My Account gives you instant online access to your tax documents, benefits, payments, and notifications, including the Notice of Assessment, Notice of Reassessment, and other tax and benefit related functions that you would normally perform by sending or waiting for a mail.
- If you cannot get satisfactory information about the Canada RIT deposit in your CRA My Account notifications, you can also call the CRA for a detailed explanation.
It is important to ensure that you are not running a joint account with your spouse. If you are, Canada RIT deposit can be for any of you, as long as the bank account is the one you submitted to the CRA for direct deposit.
Who is Eligible to Receive Canada RIT Deposit?
The Canada Revenue Agency (CRA) can make Canada RIT deposits to both individual and business taxpayers. If you have a CRA business account, you could see a Small Business Job Credit transaction description. The small business job credit is a Canada RIT deposit designed to reduce the Employment Insurance (EI) premium paid by companies or businesses.
Things to Expect After Your Tax Filing
It is essential to file your tax returns annually, regardless of whether you’ve earned income or not. There are benefits attached to tax filing from the government, such as the Canada RIT deposit, Canada FPT credit, and the Canada Pro deposit for Ontario Trillium Benefit.
After filing your taxes, here are some of the essential things you can expect from the Canada Revenue Agency (CRA).
The CRA can review or audit your tax information and tax returns from time to time by asking for information related to deductions and credits to ascertain your tax payable and tax refunds.
Notice of Assessment
This is an annual statement from the Canada Revenue Agency (CRA) with details of your income tax payable, tax credit, tax refund amount, taxes owed, and more. When you file your tax return, the CRA will send a Notice of Assessment to you by mail, which you can also access on the CRA My Account service.
GST/HST and CCB
You will get a GST/HST credit and Canada Child Benefit from the CRA in your bank account if you’re eligible for the rebates. These benefits are often paid in combination with the Canada FPT credit, a social program from the Federal-Provincial and Territorial governments. You can check the Canada FPT payment dates for the current year and eligibility requirements to apply for the benefit.
The CRA sends a tax refund within 2 weeks to 8 weeks of filing your tax return, depending on the filing method. A tax refund is a difference between tax payable and the excess amount paid when filing your income tax return. You can find this under the Canada RIT deposit in your bank statement.
What Can I Do With the Canada RIT Deposit?
Actually, the Canada RIT is your money, a refund of the taxes you filed. You’re at liberty to spend it the way you like on whatever you want. However, it is an opportunity for you to invest the money in actualizing your financial goals.
Irrespective of how low or huge the Canada RIT deposit, you can invest it in a tax-free savings account (TFSA) or a guaranteed investment (GIC). It is also an avenue to get into this year’s RRSP contribution to save towards your retirement. Besides, you could choose to pay down your debts with the money, pay for your insurance premium, mortgage repayment, and many more.
Alternatively, you can visit your financial advisor to guide you on making judicious use of your tax refund.
What does Canada RIT mean?
Canada RIT is an acronym for Canada Refund Income Tax. It is a refund of taxes you filed from the CRA.
Can visitors to Canada get a tax refund?
Non-resident visitors to Canada cannot claim a rebate of the GST/HST paid on purchases made in Canada.
Where can I get more details on the Canada RIT deposit?
Detailed information on the Canada RIT transaction on your bank account statement can be obtained from your CRA My Account or call the CRA contact center.