Most individuals pay their income tax throughout the year through source deductions (amounts withheld from their income). However, if you have income from which tax is not withheld, you may be required to pay your income tax in instalments.
Instalment payments are partial payments you make periodically throughout the year to cover your income tax for the year and, where applicable:
- your Québec Pension Plan contribution
- your contribution to the health services fund
- your premium under the Québec prescription drug insurance plan
- your Québec parental insurance plan premium
If you earn income from which no source deductions are withheld (for example, if you are self-employed or retired), you may be required to make instalment payments of income tax.
You are required to pay income tax in instalments if you meet both of the following conditions:
- You estimate that your net income tax payable for the current year will be over $1,800.
- Your net income tax payable for either of the two previous years was over $1,800.
Your net income tax payable is your income tax payable for the year minus the total, for the same year, of the Québec income tax withheld at source (line 451), the transferable portion of the income tax withheld for another province (line 454) and your refundable tax credits. In calculating your net income tax payable, do not take into account:
- the QST rebate for employees and partners
- the property tax refund for forest producers
- the grant for seniors to offset a municipal tax increase
- retirement income transferred from one spouse to the other that you included in or deducted from your income (line 123 or 245 of the return)
- the transfer of income tax withheld from retirement income (line 451.1 or 451.3 of the income tax return, as applicable)