Filing Taxes for Deceased Loved Ones – What’s Required

Losing a loved one is emotionally overwhelming, and handling their taxes can feel confusing. But the CRA has clear rules about what needs to be filed when someone passes away. Filing correctly ensures the estate is settled smoothly and prevents future issues.

This guide explains—in simple terms—what returns must be filed, who is responsible, and what documents you need.

1. Who Is Responsible for Filing?

The person responsible is usually the executor, administrator, or legal representative named in the will.

If no one is appointed, a family member can request approval from the CRA to act as the representative.

The legal representative must:

• File all required tax returns

• Pay any taxes owing from the estate

• Communicate with the CRA

• Distribute assets only after taxes are settled

If taxes are filed incorrectly, the representative—not the family—can be held liable.

2. What Tax Returns Need to Be Filed?

When someone dies, more than one tax return may be required.

1. Final Return (T1 Final Return)

This is the most important return.
It includes all income earned from January 1 until the date of death, such as:

• Employment income

• CPP/OAS

• RRSP withdrawals

• Investments and interest

• Pension income

This return must be filed even if the deceased had low or no income.

2. Optional Returns (If Applicable)

Optional returns can sometimes reduce taxes by splitting income across multiple returns.

These include:

• Return for Rights or Things

• Return for a Partner or Proprietor

• Return for Income from a Testamentary Trust

Optional returns aren’t always needed, but they can increase refunds if used correctly.

3. Estate or Trust Return (T3 Return)

If the estate continues to earn income after the date of death—such as interest, rental income, or investments—the executor may need to file a T3 return.

This applies only if the estate is open for a long period.

3. Deadlines for Filing

Filing deadlines depend on the date of death.

If the death occurred:

• Between January 1 and October 31:
  Deadline is April 30 of the following year.

• Between November 1 and December 31:
  Deadline is 6 months after the date of death.

If the deceased or their spouse had self-employment income, the deadline may extend, but any tax owing is still due by April 30.

4. What Documents You Must Gather

To file the final return properly, gather:

• Death certificate

• Will or estate documents

• All T4, T5, pension slips

• RRSP/RRIF statements

• Medical expense receipts

• Property or investment records

• Banking statements

• Notice of Assessment from previous years

You may also need CRA forms authorizing you as the legal representative.

5. What You Can Claim on the Final Return

The final return allows special deductions and credits:

• Medical expenses (often large at end-of-life)

• Charitable donations

• Home accessibility expenses

• Capital losses

• Disability amount (if applicable)

• Pension splitting

• RRSP or RRIF tax planning

Some claims are more flexible in the year of death, which can reduce the estate’s tax burden significantly.

6. What Happens to RRSPs, RRIFs, and Investments?

When someone dies, these assets may trigger taxes unless transferred to:

• A spouse

• A financially dependent child

• A disabled child (special rules apply)

Without proper planning, these accounts can create a large tax bill for the estate. Executors often seek professional help here to avoid mistakes.

7. CRA Clearance Certificate – Don’t Skip It

Before giving out any inheritance, the executor must request a CRA Clearance Certificate.

This certificate confirms:

• All taxes are paid

• No future CRA debts will appear

• The executor is released from liability

Distributing assets too early can lead to the executor personally owing CRA debt.

8. When Professional Help Is Strongly Recommended

Filing after death can be complex, especially if:

• The estate has investments

• The deceased owned property or a business

• RRSPs or RRIFs were involved

• Multiple returns are required

• There are many beneficiaries

• The will is unclear

A tax professional can prevent costly errors and ensure everything is filed correctly.

Final Thoughts

Filing taxes for a deceased loved one is an important legal responsibility. Understanding what returns are required and what documents to gather helps the process go smoothly. With the right information—and support if needed—the estate can be settled correctly, and the executor can avoid issues with the CRA.