Average Tax Refund Just Under $2,000

Beth Graddon

By May 3, the CRA received a total of 25,857,885 returns filed by Canadians – 94% of them electronically - which is 83% of the total returns filed last year. The average tax refund is $1,987: a jump from last year’s average of $1,878.  What that means is that the CRA is increasingly holding on to more of Canadians’ money throughout the year – about $165 a month – which could be put to good use in inflationary times.  With 17% of returns left to file in advance of the June 15 deadline for proprietorship, it’s also important to note that those filers who owe so far have also paid a substantial chunk.

A study released just before the May 2 tax filing deadline by IG Wealth Management indicated that 96% of Canadians were intending to file prior to the May 2nd deadline and 60% expected to get a tax refund, with an average anticipated amount of $2,400. How is tax season 2022 shaping up so far, compared to these expectations?  The CRA has provided these statistics:

Returns received from February 7, 2022 to May 3, 2022

Filing method

Number of returns

Percentage of total

EFILE

    15,308,768

59.2%

NETFILE

      8,939,904

34.6%

File my Return (FMR)

           47,595

  0.2%

Total - electronic

   24,296,267

94.0%

Paper

      1,561,618

  6.0%

Total - all methods

    25,857,885

100%

The number of electronically filed returns has also increased over last year at 94% to date compared to 91%, despite the fact that our recent poll revealed that most tax pros disagree that electronic filing should become a CRA requirement.

Returns processed from February 10, 2022 to May 3, 2022

 

Number of returns

Total dollar value

Average amount per return

Percentage of refunds

Refund by cheque

       2,923,822

    $5,379,734,988

 $1,840

  20%

Refund by direct deposit

     11,444,419

  $23,169,517,096

 $2,025

  80%

Total refunds  

     14,368,241

  $28,549,252,085

 $1,987

100%

Balance owing

       6,166,778

  $40,773,642,560

 $6,612

n/a 

Nil return

       3,770,725

n/a 

n/a

n/a

Interestingly, only 40% of the respondents in the IG Study felt confident they would be taking advantage of all tax deductions available to them.  That means that 60% of filers could benefit from tax advice, a tremendous opportunity in 2022 for tax specialists and financial advisors alike.

Bottom Line:  Now is an excellent time to train to help tax filers pay the correct amount of tax and no more both for their 2021 tax returns, which can be adjusted for errors and omissions, and in planning for their 2022 tax liabilities.      

 

Additional educational resources: With tax seasons 2022 winding down, it’s the right time to change gears and focus on how you can help reduce your clients’ taxes and build wealth this year and beyond. You don’t want to miss the May 18 Virtual CE Summit for an important opportunity to start this process with a budget, retirement and estate planning update featuring Canada’s best-selling financial authors and educators.