Will CRA take my tax refund in a consumer proposal?
Will Canada Revenue take my tax refund from 2018 year since i am about to do my taxes soon. I applied for a consumer proposal in November 2018 and making monthly payments now. However, part of my debt was from Employment Insurance and hoping Canada revenue won’t give them my tax return. how about if i go to cash back tax refund??? they will give me my refund right away so that way CRA doesn’t take it….would that be okay ??… i need that money since it will be a lot.
1 Answer
If you go to a tax preparation service that gives a cashback refund to you, they expect to get paid back from your CRA tax refund for 2018.
However, CRA is allowed to set-off your 2018 income tax refund against the EI overpayment you owe them. So once they do that, the tax preparation service won’t get back the money they gave to you. Therefore, the tax preparation service will come after you and ask you to repay them. It will be considered a post-proposal debt that you are responsible for.
Moreover, the tax preparation service could accuse you of fraud – you took money from them knowing that they would not get repaid by CRA from your 2018 income tax refund. That would be a very serious situation for you.
So my advice – don’t do anything you will regret later. Just let it slide and wait for your 2018 tax refund next year.
Your Answer
1 Answer
If you go to a tax preparation service that gives a cashback refund to you, they expect to get paid back from your CRA tax refund for 2018.
However, CRA is allowed to set-off your 2018 income tax refund against the EI overpayment you owe them. So once they do that, the tax preparation service won’t get back the money they gave to you. Therefore, the tax preparation service will come after you and ask you to repay them. It will be considered a post-proposal debt that you are responsible for.
Moreover, the tax preparation service could accuse you of fraud – you took money from them knowing that they would not get repaid by CRA from your 2018 income tax refund. That would be a very serious situation for you.
So my advice – don’t do anything you will regret later. Just let it slide and wait for your 2018 tax refund next year.