You may have encountered a deposit in your bank account one day while scrolling through your finances, and you noticed that the deposit was under the name of Canada RIT.
If this is your first time receiving this, you may wonder why the Canadian government will send you money.
You should not panic because this is money that the Canadian government owes you after their assessments showed that you have been paying more taxes than you should be.
You at least be happy they are honest enough to return the money to you instead of sweeping it under the carpet.
The Canada RIT deposit could show up in your bank account anytime, as there is no specific payment date.
The Canada Revenue Agency makes the deposits, which is why it shows in your bank account under the name of Canada RIT.
What Is Canada RIT Deposit?
The names on the deposits in your bank statements sometimes need clarification.
It can sometimes take time to tell, depending on where you get the deposits.
Something like this can also happen when you get deposits from the Canada Revenue Agency (CRA).
Almost all the deposits made from agencies such as Canada Child Benefit and Canada Workers Benefits typically show up in your bank under the name of Canada FED Deposit.
All provincial payment from agencies such as Ontario Trillium Benefit also usually shows up under the name of Canada PRO Deposit.
However, apart from the two payment names mentioned above, there is also the Canada RIT Deposit.
RIT stands for ‘Return Income Tax.’ People pay income taxes, and at the end of each year, when income taxes are filed, they compare your T4 to what you should have paid in taxes.
Here is where people usually write in their tax write-offs, such as RRSP and any other things they qualify for.
After this, if it comes to the notice of the authorities that you paid too much in taxes for a particular year, you then get a refund of your income deposited into your bank account.
This is what is known as the Canada RIT Deposit. People with straightforward tax returns typically receive tax refunds quickly after filing their taxes.
However, if it is taking too long for your tax refunds, then some scenarios have occurred.
The CRA is now reassessing your tax return. If not, you could also owe some money to the Employment Insurance on the previous year’s tax.
It could be about a CERB payment you received during the coronavirus pandemic, which has now been deemed overpaid.
If any of the above-mentioned is the case, you may receive a notice through your CRA account or a letter.
A reassessment could take the CRA about three years to complete. However, it can also be done within months. It all just depends on some factors.
The government will use your refunds to pay off that debt if you owe money.
As long as you qualify for a tax return each, you will receive one since filing taxes is a year-round occurrence.
Reasons Why You Qualified For Canada RIT Deposit
Over-Withholding
Employers hold the duty of withholding income tax from their employee’s earnings during the year.
In the case that the amount withheld exceeds the requirement, the employee is likely to receive a Canada RIT Deposit after filing their income tax return.
Tax Deductions
Certain tax deductions, for which an individual qualifies, have the potential to diminish their taxable income, ultimately leading to a reduction in total income tax liability. If these deductions were not accounted for within the year, the scenario can lead to the receipt of an RIT Deposit.
Tax Credits
Tax credits directly influence the sum of tax an individual owes, by reducing it. If these tax credits were not factored in during the year, or if unaccounted tax credits from previous years exist, they could pave the way to receiving an RIT Deposit.
How To Qualify For Canada RIT Deposit
Canada RIT Deposit does not have any qualifications that one must have before one can be eligible.
Anyone entitled to tax returns can get a Canada RIT Deposit, unlike provincial benefits such as Ontario Trillium Benefits, which one must qualify for before getting any deposits.
Canadians who file their taxes between February and April each year and rely on the T4s instead of the T4As will likely receive some form of tax return. Of course, the person must be employed.
Canada RIT Deposit Dates
There are no specific dates for the Canada RIT Deposit because it is a tax refund deposit.
The date you receive a refund depends on the time you filed your taxes and how long it took the CRA to finish processing it before they deposit the tax refunds into your account.
How To Receive Canada RIT Deposit
You can request for the Canada RIT to be deposited directly into your bank account, or you can opt for it to be sent to you in the form of a cheque via mail.
However, the best way to receive it would be through direct deposit into your bank account. You can set up a direct deposit through the following steps:
- Log into your CRA MyAccount
- Click on ‘profile’ on the left menu panel
- Now click on direct deposit,’ which can be found under the contact information
- Choose ‘edit’ and input your banking information
You have now set up your direct deposit option for receiving your tax refunds.
What Is Canada RIT/RIF?
At other times, the deposit will be Canada RIF instead of Canada RIT. This is still referring to your tax return.
Just that name under which it came is now RIF instead of RIT. Always make sure to keep this in mind so that you know which deposit you are referring to.
Some people were receiving money during the COVID-19 era while they were not working, and they were also filing their tax returns simultaneously, so it could be easy to confuse the two.
CERB payments come from the Employment Insurance and not the Canada Revenue Agency.
So it will show on your bank statement under a different name since it came from a different department.
The deposit names are also universal, irrespective of the kind of bank you save with.
What Is Canada RIT Payment?
This is a payment made to your bank account after your taxes have been deemed to be overpaid by the Canada Revenue Agency.
This payment is your tax returns, and it shows in your bank account under the name of Canada RIT.
Things To Do With Your Tax Return Deposit
You can choose to use your tax returns for whatever you deem fit. You can have the money deposited into a tax-free savings account.
This account allows you to deposit money without paying any taxes on it.
You can also use your tax return to pay off any debts. These could be credit card debts and other high-interest loans you took.
The money can also be used as a down payment for acquiring a new home.
You can also use the money from the tax return to build an emergency fund to cater for any unexpected expenses.
The money can also be saved for your retirement. You can invest the money to further your education if you are young.
It can also be used in building a college fund for your children so that you would not have to worry about their college education.
How To Verify That You Have Received Canada RIT/RIF Deposit
When you see a deposit in your bank account, and you are trying to figure out what kind of deposit it is, or you were not aware that you would be receiving a tax return, there is a way you can check to verify.
You can log in to your CRA MyAccount to verify any deposits made into your accounts and why the deposits were made into your account.
This will help you to clear any confusion that may arise after you see that a Canada RIT deposit has been made into your account.
Frequently Asked Questions
This is a transaction that means ‘return of income tax.’ This means that the Canada Revenue Agency, after processing your tax filings, found out that you paid more than you should in taxes, so the excess has been returned to you. The deposits are usually made into your bank account.
Payments can be made once a year in large sums. However, as we saw in the article, the tax return could be deposited later or delayed due to some issues.
There are deposit dates, so you cannot know when the money will be deposited into your account. Another deposit could even be made when you least expect it.
Conclusion
Receiving a tax deposit is a great thing. Although some people can change their basic tax plans with their employers to make them pay less in taxes so
they receive fewer tax refunds; others feel that they may spend the money, so it is better for the money to later be returned to them in the form of tax returns.
So we now know what Canada RIT and Canada RIT/RIF are and what they are all about.
They are tax returns deposited into your bank accounts after assessment shows that you have been paying much in taxes. if might also want to check out how to earn free money through Canada FTP here.
