How to Set Up a CRA Payment Arrangement When You Cannot Pay Your Tax Debt

When can you ask CRA to pay tax debt over time?

If you cannot pay a CRA debt in full immediately, the Canada Revenue Agency allows taxpayers to discuss a payment arrangement based on their ability to pay. The arrangement divides the balance into payments made over time rather than cancelling or reducing the underlying debt.

CRA recommends acting early. Leaving a debt unpaid without contacting the agency can lead to additional interest, applicable penalties, offsets of government payments and eventually collection action.

If your financial problems extend beyond a CRA balance and you cannot repay your overall debts, a CRA payment arrangement is different from a formal insolvency process. Helpydo also explains how a consumer proposal works in Canada.

How much should you offer to pay each month?

CRA instructs taxpayers to calculate their monthly income and expenses before setting up an arrangement. The goal is to identify a regular payment you can realistically afford while meeting necessary living expenses.

CRA provides a monthly net income and expense worksheet for this purpose. If your arrangement requires review by a collections officer, CRA may ask for supporting information about your income, expenses, assets and liabilities and may verify what you provide.

A payment arrangement is not automatically accepted simply because a particular monthly amount is proposed. CRA collections policy states that arrangements are considered according to the taxpayer's ability to pay and overall financial circumstances.

Can you set up a CRA payment arrangement online?

Yes. CRA allows a series of automatic payments to be scheduled through a pre-authorized debit agreement in supported CRA online services. Individuals can use My Account, and authorized legal representatives for individuals may use Represent a Client where applicable.

For some taxpayers, CRA also displays the Manage balance service in My Account. In 2026, CRA states that people with personal income tax or COVID-19 benefit debt of $1,000 or more may be able to use this service. Depending on the account, it can provide options to make a full or partial payment, schedule a series of payments, view collections contact information or request a callback.

The Manage balance option is not guaranteed to appear for every debt or taxpayer. If the appropriate online option is unavailable, contact CRA directly.

How do you arrange payments with CRA by phone?

You can contact CRA to set up or change a payment arrangement or to explain that you cannot pay immediately. Use the phone number shown on the CRA notice for the debt or the appropriate collections contact listed by CRA for the type of debt involved.

If you received a letter from a CRA collections officer, CRA instructs you to call the officer at the number provided in the letter as soon as possible.

What should you have ready when you call?

CRA says you may need information including your Social Insurance Number, full name, date of birth, complete address and information from an assessed return, notice of assessment, reassessment or another tax document. You may also be able to use information available while signed in to your CRA account.

If CRA needs a fuller review of your finances, a collections officer may ask you to provide documents supporting your income, expenses, assets and liabilities.

Does CRA stop charging interest after an arrangement is approved?

No. A payment arrangement normally does not stop interest on an unpaid tax balance. CRA collections policy states that interest continues to be charged on amounts owing until the debt is paid in full. Interest on tax debt is generally compounded daily at the prescribed rate.

Depending on the debt and circumstances, penalties may also apply. A separate taxpayer-relief process can sometimes cancel or waive penalties and interest where CRA's legal criteria are met, but that is not part of an ordinary payment arrangement. See Helpydo's separate guide on requesting CRA relief from penalties and interest.

What are your responsibilities after the arrangement starts?

CRA requires you to make payments on the agreed dates, file future returns on time and stay current with your tax obligations. CRA may periodically review an existing arrangement.

To start the payment arrangement, CRA states that you need to make your first payment toward the debt.

If your circumstances change and you cannot make an upcoming payment, contact CRA to change the arrangement. Do this before missing the payment or paying less than agreed.

What happens if you miss an agreed payment?

If you pay less than agreed or stop making payments without first modifying the arrangement, CRA may proceed with collection action. Contacting CRA promptly is therefore important when your income or expenses change.

CRA's collection options depend on the type of debt and circumstances. The agency states that unpaid debts can lead to legal collection actions after the required notices have been given.

Can CRA still take your tax refund while you have a payment arrangement?

Yes. CRA states that even while you are making payments under an arrangement, it may apply certain tax refunds, government credits or benefit payments that would otherwise be paid to you against an outstanding government debt. This is known as an offset or set-off.

The exact payments that can be offset depend on the type of debt. Check the correspondence in your CRA account if a refund, credit or benefit was applied to an outstanding balance.

What if you cannot afford the proposed payments?

Contact CRA rather than ignoring the debt. CRA's collections policy says that when a taxpayer cannot make a payment because of circumstances beyond their control, the agency may in some cases allow payment to be postponed until the financial situation improves. Any applicable interest and penalties can continue during that period.

A collections officer may require detailed financial information before deciding what arrangement is appropriate. CRA may also expect taxpayers to have considered reasonable ways to obtain funds or reorganize their finances before agreeing to longer-term repayment.

Is a payment arrangement the same as CRA tax instalments?

No. A payment arrangement deals with an existing debt you already owe. Tax instalments are advance payments toward tax that an individual expects to owe for the current year.

For 2026, most individuals who are required to make instalments have payment dates of March 15, June 15, September 15 and December 15. Those instalment obligations can continue separately from an arrangement for an older balance.

Common mistakes to avoid

• Ignoring a collections letter because you cannot pay the entire balance immediately.
• Agreeing to payments that your monthly budget cannot realistically support.
• Assuming interest automatically stops when a payment arrangement begins.
• Missing a scheduled payment without contacting CRA first.
• Failing to file future tax returns or pay new obligations while repaying an older debt.
• Assuming CRA cannot apply a future refund, credit or benefit against the debt because an arrangement exists.
• Confusing an arrangement to repay existing debt with required current-year tax instalments.

What happens next?

Continue making the agreed payments until the balance is cleared or CRA agrees to a revised arrangement. Check your CRA account periodically to monitor the balance and correspondence.

If a financial change makes the arrangement unsustainable, contact CRA promptly. If the underlying problem concerns penalties or interest caused by circumstances that may qualify for taxpayer relief, use the separate CRA relief process rather than simply stopping payments.