You’re minding your own business. Doing some online banking. When you notice a mysterious direct deposit in your bank account labelled “Canada RIT.”
Unfortunately, it’s not the beginning of a Dan Brown novel where you have to figure out what the RIT is, and how to trace the money back to this shadowy organization.
RIT stands for Refund Income Tax. It’s your tax refund!
In this article, we’ll explore when you should get your Canada RIT payment, how you can confirm it — and most importantly, what you should do with it.
What is the Canada RIT Deposit?
After you file your income taxes, the Canada Revenue Agency (CRA) crunches the numbers.
The amount automatically deducted from their paycheques as taxes was too much for many people. Those people will get what’s known as a "tax return."
If the government owes you a tax return and you’ve linked your chequing account with the CRA, you’ll get the return automatically deposited and it'll show up on your bank statement. That amount will be labelled “Canada RIT” or “RIT/RIF.”
How to Confirm Your RIT Deposit
If you’d like to make extra certain you aren’t the lucky benefactor of, say, Reginald Irwin Thompson, you can confirm that your RIT deposit is your tax return.
To do that, log into your My Account with the CRA. If you don’t have one, it’s easy to create, either for a CRA business account or a personal account. This site provides online access to all the information you need about your tax documents and other financial correspondence with the government.
Once you’re in, check the message section. You should have a note from the CRA letting you know that your RIT has been deposited in your chequing account.
Sweet — Free Money! What Should I Do With it?
Hold your horses. While it’s tempting to spend your tax return on a shiny new toy, you’ll thank yourself for being responsible.
Remember: it’s not free money. It’s money that you’ve worked for. It was just taken away temporarily, then returned to you. Hopefully, you wouldn’t blow your paycheque all in one go — you should treat your Canada RIT deposit the same way.
Here are some ideas for what to do with the RIT.
Pay off Debts
The number one thing any person should do to become financially stable — with a few exceptions — is to get debt-free.
If you’re carrying a balance on your credit card, this could be the time to pay it off. Want to speed up your student loan payoff timeline a bit? Now’s your chance. If you can pump some more money into your mortgage, go for it.
Paying off debts will allow you to invest in money-making opportunities without fear — and the mental benefits of being debt-free are enormous.
Save it for Your Emergency Fund
If you don’t have any debts, you should focus on building up an emergency fund. That way, the next time you’re hit with an unexpected expense, you can cover it instead of going into debt.
Once you have an emergency fund and are debt-free, it’s time to make some money. The stock market can seem intimidating, but there are easy ways to get started with minimal risks — such as by creating a TFSA or RRSP and investing it in an ETF. If you're not sure what those terms mean, it might be time to do some research. Your future self will thank you.
Of course, if you’re debt-free, with a solid emergency fund, and you’ve hit your investment targets, you might make the call to spend your tax return on something fun. After all, what’s the point of being disciplined with your money if you can’t enjoy it?
Who Gets the Canada RIT?
Lots of people! There are no specific eligibility requirements. Every person in Canada who is owed a tax return by the government will get that return in the form of the Canada RIT.
Is the Canada RIT Taxable?
Nope. It’s your tax return. That means it’s the tax money you’ve already paid to the government. But since you paid too much, the government gives you some back. So you don’t have to pay taxes on the taxes you already paid.
Canada RIT Payment Dates
Unlike GST rebates, there are no specific dates when the Canada RIT is paid out. But you can expect to get the deposit about two weeks after you file your taxes online — or eight weeks after you file a paper copy by mail.
You'll usually get your RIT/RIF deposit shortly after the tax deadline. But you may get it at a completely different time of year if the CRA has filed a notice of reassessment for you. This means they want to take a closer look at something you mentioned on your taxes — so it could take a while for them to process your tax return.
How Often Do You Get the Canada RIT?
Once per year. The CRA gives your tax return to you all in one lump sum. You don’t get it quarterly or monthly, like some other benefits.
How Much is the RIT?
This depends on how much you paid in taxes. It could just be a couple of hundred dollars, or it could be many thousands. There is no set maximum or minimum for how much the RIT/RIF deposit will be.
Some Other Canadian Government Deposits
The RIT/RIF tax return likely won’t be the only payment the CRA automatically deposits into your bank account. Here are a few other deposits you may see show up in your chequing account.
If you’re in Ontario or Alberta, you may be familiar with the Canada Pro deposit. It's a combined deposit for the Ontario Trillium Benefit (OTB) and the Alberta Child and Family Benefits (ACFB).
These benefits are aimed at low-to-medium earners in their respective provinces. How much you’ll get depends on your financial situation — and whether you qualify in the first place — just like the amount you get on your tax return.
The Canada FPT deposit is a blanket term for “Federal/Provincial/Territorial” benefits. If you see this in your chequing account, it means you’ve met the requirements for one of the following:
- Canada Child Benefit (CCB)
- Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- BC Climate action tax credit
Since these are different programs administered in different regions, they all have varying requirements and payment schedules.
Your GST/HST deposit is a rebate on sales taxes from the federal government.
This credit is paid on the fifth day of each quarter (or the previous business day, if the fifth day happens to fall on a weekend or statutory holiday).
Generally, the GST/HST credit is paid at the same time as provincial programs, like the following:
- BC climate action tax credit
- New Brunswick harmonized sales tax credit
- Newfoundland and Labrador income supplement
- Northwest Territories' cost of living offset
- Nova Scotia affordable living tax credit
- Ontario sales tax credit
- Prince Edward Island sales tax credit
- Saskatchewan low-income tax credit
- Yukon government carbon price rebate
Canada Workers Benefit
The Canada Workers Benefit (CWB) is a tax credit for low-income people and families.
It’s made up of the basic amount, plus a supplement if you have a disability. The amount depends on several factors, including marital status, dependents, and the income earned by the person receiving the benefit.
Depending on the recipient, it can be paid out in a lump sum or quarterly.
What does Canada RIT stand for?
Canada RIT stands for Canada Refund Income Tax, meaning your income tax return. It’s also sometimes listed as “RIT/RIF.”
How can I find out more about my RIT/RIF?
Check your My Account with the CRA for more details about all your tax responsibilities — including what you’ve paid, and what the government has given you back.
Do I have to report my RIT deposit on my taxes?
No — your RIT/RIF deposit is your tax return, meaning you don’t have to list it on next year’s taxes.
While it can be unnerving to see strange activity in your bank account, the Canada RIT/RIF deposit is a good thing.
It means the tax system is working as intended — giving you back the excess money you’ve paid the Canadian government over the past year of working.
And more importantly, it’s a lump sum of money that you’re free to spend however you want. But that doesn’t mean you should go wild with it.
While lots of companies up their advertising around the April tax season, it’s almost always better to save your return, pay off debts, or invest it. You’ll be a lot better off in the future.