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    • What happens if you mistakenly get a larger tax refund?

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    Was your 2022 tax refund larger than you expected it to be?

    For many, this likely comes as a pleasant surprise. However, overpayments are likely the result of a mistake on your part or the Canada Revenue Agency (CRA). If you don鈥檛 amend your returns and the overpayment isn鈥檛 returned, you could end up in hot water with the CRA.

    Below, I鈥檒l explain what you should do if you mistakenly get a larger tax refund, outline some of the most common reasons why this could happen, and explain how to amend your returns to fix the error.

    What should you do if you get a larger tax refund than you expected?

    Mistaken overpayments of tax refunds may be caused by a number of things, such as:

    • Clerical errors with the CRA (which aren鈥檛 your fault)
    • Improperly claimed tax deductions and credits
    • Recent changes made to tax laws

    Small overpayments are relatively common when it comes to tax refunds. When you file your taxes, your accountant or tax software can only provide you with an estimate of what your refund will be. This number can change after closer review by the CRA, which can put some extra money in your pocket.

    In this case, the overpayment is legitimate, meaning you shouldn鈥檛 have anything to worry about.

    However, if your tax refund was significantly larger than you expected, then it鈥檚 your responsibility to figure out what happened, on your part, and settle the overpayment with the CRA.

    Can the CRA find out if you鈥檝e been overpaid?

    It may be tempting to keep the overpayment and hope that the matter goes unnoticed by the CRA. While this is a possibility, you shouldn鈥檛 count on it. At any time, the CRA could realize the error, perform a tax audit, and force you to repay the amount.

    If the CRA has reason to suspect that the overpayment resulted from outright deception, you could face additional penalties on top of repaying the overpayment. can include:

    • Repayment of civil fees
    • A 200 per cent fine on the amount of taxes avoided
    • Up to five years in prison

    The CRA imposes these somewhat harsh penalties to keep everyone honest, and you really don鈥檛 want to be on the receiving end.

    How to amend your tax returns

    Thankfully, the CRA makes it incredibly easy to amend your tax returns, especially if you file online or use NETFILE-approved. Your options include the following:

    • Change your return through your CRA My Account ()
    • to your local tax centre, including copies of the amended documents and a detailed list of changes to be made to each return
    • Filing a adjustment request form through your local tax office

    Within a few weeks after amending your tax returns, the CRA should send you a notice detailing how the changes may have affected the refund you received. In most cases, you鈥檒l be asked to repay the amount to the CRA as a lump sum payment or be required to arrange a payment plan.

    Common mistakes that could lead to overpayment on your tax refund

    Now that you know what to do if you鈥檝e received an overpayment from the CRA, let鈥檚 take a quick look at some of the most common mistakes that could lead to an overpayment.

    1. Ineligible expenses

    This is one of the most common reasons you may receive an overpayment. If you鈥檙e filing your taxes by yourself and you don鈥檛 fully understand the tax laws and eligible deductions, you may claim expenses and tax deductions that you aren鈥檛 legally entitled to.

    2. Clerical errors

    Just as human error is possible on your part, clerical errors may also result from mistakes made by the CRA or their accounting systems. While it鈥檚 not as common, mistakes do happen.

    If you believe that the CRA made an error and underpaid/overpaid your tax refund, you鈥檒l need to and discuss your case. If it appears that the error may be the CRA鈥檚 fault, then you can request a formal review.

    3. Changes to tax laws

    Tax laws and tax rates change periodically. If you haven鈥檛 stayed updated with the latest changes, you may not file your tax returns accordingly, which can result in underpayment or overpayment.

    Don鈥檛 be afraid to get professional help

    Navigating the complexities of tax returns and amendments, plus dealing with the CRA can be difficult, to say the least. Even though tax software can make things easier, you may still benefit from working with a professional tax preparer or accountant, especially for complicated cases.

    Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his .

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