Interest income is one of the most commonly overlooked items on a Canadian tax return — particularly for people with multiple accounts, new HISAs, or compound GICs. The problem is that CRA gets T5 slip data directly from your bank, so any missing interest income is easy for them to catch.
Why CRA Already Has This Information
Every bank, credit union, and financial institution that pays you $50 or more in interest per year must issue a T5 slip (Statement of Investment Income) and file a copy with CRA by the end of February. CRA’s systems cross-reference this data against your filed return.
If you earned less than $50 in interest from a given institution, they may not issue a T5 — but you are still required to report that income. Many Canadians miss small interest amounts because they never received a slip.
What Counts as Interest Income (Line 12100)?
| Source | Reportable? |
|---|---|
| HISA interest | Yes |
| GIC interest | Yes — even if not paid out yet (see below) |
| Savings account interest | Yes |
| Bond interest | Yes |
| Treasury bill discount | Yes |
| Informal personal loan interest | Yes |
| Canada Savings Bond interest | Yes |
GICs and Accrued Interest
For compound (non-cashable) GICs with a term longer than one year, CRA requires you to report accrued interest on each anniversary date — even before you receive the cash. This catches many people off guard when a 5-year GIC matures.
For example, if you hold a $50,000 compound GIC at 4%, you must report approximately $2,000 in interest income each year of the GIC’s term, not all $10,800+ when it matures.
What Happens If CRA Finds It Before You Fix It
CRA will issue a Notice of Reassessment that:
- Adds the missing interest income to line 12100
- Recalculates your tax owing at your marginal rate for that year
- Adds arrears interest from April 30 of the filing year at CRA’s prescribed rate (currently ~8–9% annually, compounded daily)
- Adjusts any income-tested benefits (CCB, GIS, GST credit) that were calculated based on the understated income
How to Fix It
Step 1: Find all missing T5 slips
Log in to CRA My Account → Tax information → Tax slips. CRA posts T5 data from all institutions that filed slips in your name. You can also check your online banking portals — most financial institutions provide tax documents under “Documents” or “Tax Centre.”
Step 2: File a T1 Adjustment
Online (2 weeks): CRA My Account → “Change my return” → select the tax year → update line 12100 with the corrected total interest income.
By mail (8–12 weeks): Complete Form T1-ADJ, list line 12100 and the corrected amount, attach a copy of the T5 slip(s), and mail to your tax centre.
You can request adjustments going back up to 10 tax years.
Step 3: Pay any balance immediately
Once your return is reassessed, pay any additional tax owing promptly to stop interest from compounding further. Payment options:
- CRA My Account → Make a payment
- Online banking (add CRA as a payee: “CRA (Revenue) – 2025 Tax Return”)
- Canada Post outlet with a remittance voucher
Multiple Years of Unreported Interest
If you have several years of unreported interest income, consider the Voluntary Disclosures Program (VDP). VDP allows you to come forward proactively and may result in partial interest relief and waiver of gross negligence penalties. A tax accountant can help assess whether VDP is appropriate.
How to Avoid Missing Interest Income in Future Years
- Download your T5s early — most banks post them in online banking by mid-February
- Check CRA My Account — all T5s filed on your behalf appear there by April
- Track GIC anniversaries — note when compound GICs accrue reportable interest
- Consolidate accounts — fewer institutions means fewer slips to track