Correct Federal Tax Instalment Threshold for CLetter

One of our clients owed $125.54 and the federal tax instalment paragraph in the CLetter for 2020 T1 Module appeared showing quarterly instalments of $31 to be paid…CRA says if net tax owing is greater than $3,000, instalments need to be paid. Please correct.

Check the installment calculation page. There are 5 calculations: 3 universal and 2 specifically for farmers and fishermen.

You may need to override to get the desired result. (Alternatively, just customize the letter.)

I like for my displayed amounts to match CRA’s amounts so have defaulted to that calculation method.

The calculation could use some tweaking though as I will get scenarios like Teena has described when I believe the Sept & Dec amounts requested will be zero instead of the small amounts.

Also the rounding method seems to be different than CRA as I am quite regularly a dollar off the CRA requested amount.

2020 T1 Module - Instalment worksheet, Why does the “Automatic” option not take into consider that CRA says if net tax owing is greater that $3,000, then instalments need to be paid? Option is set on “Automatic” and it says our client owing $125.54 must pay quarterly instalments??? Does TaxCycle plan on fixing this?

Without seeing a file, I would guess that the client owed more than $3000 in the prior year and TaxCycle is being cautious.
Please review the calculations on the Instalment worksheet and if you are comfortable with the client not paying any instalment for the coming year, simply change the selection from “Automatic” to “No instalments required”, that does not create an override.

I went back and took another look at the client’s file and you are correct! The client did owe more than $3000 in prior year. Thank you very much! This helps us understand everything TaxCycle is taking into account! :grin: