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How to Manage the Taxes of Someone That Has Passed Away

Portrait of a smiling senior couple embracing while sitting at home

Dealing with paperwork during tax season can be overwhelming, but recouping after the death of a loved one is far more difficult. Dealing with the two combined may be the last thing you want to do, but it will be easier with an Elite Tax professional by your side. There are, however, a few tax-related procedures that you as a family member should consider:

Transferring Benefits

If your loved one was receiving benefits and credit payments (i.e. goods and services tax/harmonized sales tax [GST/HST] credit, working income tax benefit advance payments and/or Canada child benefit), contact the Canadian Revenue Agency to halt payments. If a GST/HST credit payment is accidentally sent out after the time of death, the family is responsible for returning it to a tax centre.

In some cases, these payments may be transferred to a family member. If the deceased had a spouse or common-law partner, he or she may receive the GST/HST credit if they have filed an income tax return. If the person died during or after any of the months (July, October, January and April) scheduled for payment, the CRA will send the payment, if not withdrawn, to the person’s estate.

If the deceased had a child who receives GST/HST credit payments, the new guardian must contact the CRA to transfer the benefit. The procedure is the same for the Canada child tax benefit, the universal child care benefit, and the Canada child benefit, but if the new caregiver is not a parent, a new application is required.

A Final Return

A final tax return must be filed after a death by a legal representative, disclosing the deceased’s income from January 1 to the date of death. The deadline for this is April 30 of the following year; if the person passed away between January 1 and October 31, or six months after the date of death if the death occurred between November 1 and December 31. If the death occurred in 2017, the return will be processed according to the tax legislation of 2016. However, if there are changes in tax law for 2017, the representative can ask for a reassessment in 2018.

In the event that income continues to accrue after death, earnings can be reported through a T3 Trust Income Tax and Information Return. If the deceased was paying taxes through installments during the year in which they passed, payments due after the date of death are no longer required. If the deceased failed to file their return for any previous years, their legal representative is required to file on their behalf.

Recuperating after the death of a loved one is difficult. Filing their taxes can be especially burdensome, which is why here at Elite Tax, we can take care of the formalities during your time of grieving. For more information on the deceased’s final return and how to complete it, speak with an Elite Tax professional.