Deceased Tax Return

Filing a Tax Return for a Deceased Individual

When someone dies, their legal representative must file a final T1 Income Tax and Benefit Return, called the Final Return, to report the deceased person’s property, investments and other taxable income, and can file other optional T1 returns if the person who died had eligible income.

A T3 Trust Income Tax and Information Return (T3 Return) might also need to be filed for the estate of the person who died.

The legal representative may be able to claim deductions and credits in these returns to reduce the amounts that the person who died or their estate might owe.

What are the tax returns filed in Canada for a Deceased individual?

There are three types of deceased returns that might be filed after death. The legal representative has to file at least one return called the Final Return. However, it’s possible to file multiple returns after death which include Optional Returns and the Trust returns.

You may use the optional returns to declare certain types of income that can’t be claimed on the final return. Also, by claiming certain amounts more than once, splitting them between returns, or claiming them against certain kinds of income, you may be able to reduce or eliminate the deceased’s tax payable.

When are the returns and the taxes owed due?

The Final Return
  • If the death occurred between January 1st and October 31st, you have until April 30th of the following year.
  • If it was between November 1st and December 31st, it’s due six months after the date of death.
  • The Return for Rights or Things is due by the later of one year from the date of death or 90 days after the mailing date of the Notice Of Assessment (NOA) for the final return.
  • The other optional Returns such as Return for a Partner or Proprietor and the Return of Income from a Graduated Rate Estate are due on the same date as the final return.
  • The T3 Trust return is due 90 days from the end of the trust’s tax year. The T3 tax year starts the day after the death date and the end date can be any date up to one year from the date of death. This means that the due date for the T3 return could be before the final return.
  • When someone passes away, in addition to regular income tax, they may or may not have to pay tax on what they owned. The Final Return is how the legal representative finds out if the deceased owes any income tax. Like all other debts, income tax has to be paid by the estate first, before people can inherit;called “settling the estate”. The NOA for the deceased tax return is one of the documents the legal representative needs to get a clearance certificate and distribute property from the estate.

What information do I need for the deceased’s tax return?

  • You have to know the deceased’s income from all sources, from January 1st of the year of death up to and including the date of death.
  • You will probably have to look at previous returns and may have to contact employers, banks, trust companies, stockbrokers, and pension plan managers.
  • You’ll gather information slips and any other documentation that you need to indicate or estimate income and deductions.

The final return cannot be submitted through NETFILE. You’ll have to mail it to the deceased tax center.

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