In Ontario if you owe more than $3000 in taxes for 2 out of the past 3 years, you will have to pay the CRA installment payments. Once the government knows that you owe more than $3000 for 2 out of 3 of the past years, you will receive a letter in the mail that details the suggested payments and dates for payments.

The CRA assumes that your income will not change much and if you owed more than $3000 it is likely that you will owe that same amount again. The CRA thinks that you should know how much in taxes you’re going to pay and therefor make these installment payments on your own.

Over the course of a year, many people have taxes deducted by their employer from their paycheques or other sources of income. Your employers are responsible for paying or “remitting” the deducted income from your paycheck on your behalf to the CRA.

If you do not have enough taxes remitted throughout the year, the government expects you to remit the taxes yourself. These remittances are basically “prepaying” the taxes you will owe next April.