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What is the Canada RIT Deposit?

Written by Jessica Steer
Deposit names on your bank statement can be very confusing. Depending on where you are getting the direct deposit from, it can be difficult to tell what the deposit is for. This is especially the case when it comes to deposits from the Canada Revenue Agency. All federal deposits, like the Canada Workers Benefit or Canada Child Benefit, show up under the name Canada FED Deposit and all provincial payments, such as the Ontario Trillium Benefit, show up as Canada PRO Deposit. Besides these two, there is also the Canada RIT Deposit. What exactly is the Canada RIT Deposit?
Table of Contents

    Deposits made under the Canada RIT Deposit

    The RIT in Canada RIT Deposit stands for “Return Income Tax”. Since everyone pays income taxes, at the end of the year when you file your taxes, your T4 is compared to what you should have paid in taxes. This is where you add in your tax write offs like RRSPs and other things you qualify for. Once that is done then, if it shows that you paid too much in tax for that specific year, then in Canada, refund income tax will be deposited into your bank account.

    Qualifications for the RIT Deposit

    Unlike other deposits from the Canada Revenue Agency (CRA) Canada FED Deposit, there are no qualifications needed to receive a Canada RIT Deposit. Unlike the Canada PRO Deposit, which is for provincial benefits like the Ontario Trillium Benefit, anyone who is entitled to a tax return is eligible for Canada RIT Deposit.

    Deposit Dates

    Because the RIT deposit is a tax refund, there are no specific deposit dates. When you receive your refund is based on when you file your tax return as well as how long it takes the CRA to process it before depositing the funds.

    If your tax return is pretty straightforward, chances are that you will receive your tax refund pretty quickly after filing your taxes. If you notice that it is taking a while for you to receive your refund, most likely one of two scenarios have occurred. Either the CRA is reassessing your tax return or you owe money to either Employment Insurance, on last year's taxes or even on a CERB payment you received during COVID-19 that was deemed to be an overpayment.

    For any reason that there is a delay in receiving your tax return from the federal government, you will receive a notice either through your CRA My Account or by a letter in the mail. In the case of a reassessment it can take the CRA up to three years to finish, but it could also be only just a few months depending. In the case that you owe money, the government will keep that money to go towards your debt.

    Since doing your taxes is a yearly occurrence, as long as you qualify for a tax return every year, then you will receive one. If you are self-employed and pay your own taxes, you will not receive a tax return but you will be able to reduce the amount of tax that you pay yearly. In order to get the best tax return or file your taxes to save the most amount of money, it is recommended to have a CPA (Chartered Professional Accountant) or a tax professional to help you with your yearly return.

    How does the RIT/RIF deposit work?

    Sometimes, instead of the deposit saying Canada RIT Deposit, it could say Canada RIF Deposit. This is still your tax return, it just comes under a different name. It is important to keep this in mind to make sure that you are referring to the right deposit.

    Some people were receiving money from being off work due to COVID-19 at the same time as they were receiving their tax return. It would be easy to confuse which deposit is which. The CERB payment was made from Employment insurance though instead of the Canada Revenue Agency. This means that it would show up on your statement under a different name since it’s a different department. It doesn’t matter if you bank with any of the top 5 banks like BMO, or a smaller bank or credit union, the deposit names are universal and stay the same.

    Ways to use your income tax return

    Receiving your tax return yearly often feels like a nice bonus. A lot of times we have plans for that money as soon as we know it is coming. Depending on how much you receive, you could do something like go on a vacation or buy something you have been thinking about for a long time, but there are actually a lot of things that you could do with that money. No matter which way you choose to use tax refunds, it is yours to spend however you choose. Here are a few ideas on how to let that money help you just not now, but in the future as well.


    One thing you could do is put that money into a Tax Free Savings Account. In a TFSA you are able to invest a certain amount of money without paying taxes on it. You are allowed to put in a certain amount of money every year before you are taxed. The great thing about a TFSA is that, even though you do earn a small amount of interest on that money, you are able to take the money out whenever you need it. Even if you want to lock the account to avoid taking the money out without a really good reason, there is no penalty.


    Another great way to invest your money is through an RRSP. The only thing with an RRSP though is that there is a penalty when you take out the money early. You do earn more interest on an RRSP than a TFSA and you can use it when you file your taxes to save money or get a larger refund. The only exception to avoiding penalties when taking money out of your RRSP is to buy your first home. You can take the money out as a down payment and then pay it off over a period of 15 years to avoid any penalty.

    Pay off your debt

    If saving isn’t something you are heavily thinking about right now, then paying off your debts may be a good idea. High-interest debts like credit cards and high-interest loans end up costing you way more money over time than just what you borrowed. Sometimes even double if not more. Paying these debts off can make a large financial difference so using your tax return to do this is very smart.

    Save for a down payment on a house

    Whether you choose to save in a TFSA, RRSP or any other form of investment, many people choose to start saving for a down payment on a home. Depending on how much your tax return is, this can help jumpstart your goals or add to them helping you to achieve them faster.

    Canada RIT/RIF Deposit and annual income

    While you do receive this deposit from the Canadian government, it is not considered to be income like an Employment Insurance or any other benefit payment would be. Receiving a tax return means that you have overpaid your yearly taxes so the federal government is just returning the money that they owe you. That being said, when you receive a deposit from Canada RIt/RIF Deposit, you should verify that you are supposed to be receiving that money as well as that it is the correct amount. If anything is incorrect, you will have to pay that money back.

    How to verify why you received the Canada RIT/RIF Deposit

    Once you have received the direct deposit into your account, if you are unaware that you should have been receiving any money or the amount looks weird, there are two ways you could check to verify that the deposit is correct.

    The first thing you can do is to log into your CRA MyAccount. This will verify any deposits that were made from the CRA into your account as well as why they were deposited. This should clear up any confusion.

    If you still think something is off or do not have a CRA MyAccount, the other thing you could do is call the CRA directly. While there may be long wait times involved, they will be able to verify if the deposit you received is correct as well as help correct any mistakes.

    Is it good or bad to receive a tax return?

    Receiving a tax return is a good thing. While you can change your basic tax return with your employer so you pay less taxes and have less of a refund, many people feel they would just spend that money anyway and this way they have a large chunk they could invest and use once they receive it. The reality is, no matter which way you choose to do it, the money is yours. You can use it however you choose and set up your tax payments however you like. As long as the money was supposed to be yours and you don’t have to pay anything back, you are good to go.

    Now that you know the Canada RIT/RIF is your yearly tax return, you can check and verify you should be receiving that money before you spend it, to avoid having to take the money out of your own pocket if you need to pay anything back.

    Closing Comments

    The Canada RIT/RIF Deposit is just one of many different deposits that you receive from the federal government. While the names of these deposits may seem confusing in the beginning, they usually stand for the reason that you are receiving the money. As long as you file your taxes every year and are entitled to a refund you should receive one and, as mentioned above, it is advised to use a CPA or a tax professional to help you get the most of your money.

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