What is an installment payment?
An installment payment is a partial income tax payment made trough the year in order to reduce and make regular contributions to your income tax payable at year end. As far as the Quebec tax act, your installment payments must also cover your contributions to the Quebec pension plan, the Quebec health services fund, as well as the Medicare Insurance.
Reasons for …
The taxpayers who are making installments reduce their payable income tax at the production date of their tax returns.
The installments must be done per any individual whom income tax at source is not enough to cover the income tax payable at year end or for any individual who is not paying income tax at source.
You must make installments if you evaluate your income tax and other contributions for the current year or if you had to pay for one of the last two prior years an amount which exceed over 2 000$ to the government of Canada and/or an amount of 1 200$ to the government of Quebec.
For both tax departments you must make your installments on a quarterly basis on March the 15th, June the 15th, September the 15th, and December the 15th.
Corporations: you must make your installments on a monthly basis, on the last day of each month. The amount of the installment is calculated on your prio year income tax returns (T2 – Canada, CO-17 Quebec).