How Long to Keep Tax Records Canada?

Tax record retention is an important aspect of financial management for Canadian taxpayers. Maintaining accurate and accessible records ensures compliance with the Canada Revenue Agency’s (CRA) requirements. Proper record keeping allows individuals to support claims made on their tax returns and can facilitate a smoother process if the CRA ever requests to review financial information.

General Record Retention Period

The Canada Revenue Agency requires taxpayers to keep their supporting documents for six years. This retention period begins at the end of the last tax year to which the records relate. For example, documents for the 2024 tax year, filed by April 30, 2025, must be kept until the end of 2030.

This six-year rule applies to most individual tax situations. It provides a standard timeframe for managing financial documents responsibly. This guideline is key for tax record management.

Specific Situations Affecting Retention

Certain circumstances require a longer retention period than the standard six years. Businesses (sole proprietorships, partnerships, and corporations) follow the six-year rule, with the period starting from their fiscal year end. Records supporting business income and deductions must be retained for six years from the end of the last tax year or fiscal period.

Records for capital property acquisition and disposition, such as real estate or investments, require longer retention. Documents like purchase agreements, statements of adjustment, and renovation receipts must be kept for six years after the property’s disposition is reported on a tax return. This means records may be needed for decades if property is held for many years.

If a taxpayer objects to an assessment or initiates an appeal with the CRA, all relevant records must be kept until the dispute is fully resolved. This ensures supporting evidence is available throughout the review. Individuals changing residency status may also have specific record-keeping obligations that extend beyond the general period.

Types of Records to Retain

Canadian taxpayers should retain various documents to support information reported on their income tax and benefit returns. These include:

• All T-slips, such as T4 for employment income, T4A for pension or other income, T5 for investment income, and T2202A for tuition.
• Receipts and supporting documentation for deductions or credits claimed, including medical expenses, charitable donations, childcare invoices, employment expenses, and home office deductions.
• Statements detailing investment income, capital gains or losses, and adjusted cost base calculations for investment activities.
• Property tax assessments and mortgage interest statements.

These records allow taxpayers to accurately prepare returns and provide verification if requested by the CRA.

Methods for Keeping Records

Taxpayers have flexibility in how they store their tax records, with both physical and digital methods acceptable. For physical records, organize documents systematically, perhaps by tax year and category, for easy retrieval. Store these records in a secure, dry place to protect them from damage or loss.

Digital record-keeping is increasingly common and acceptable to the Canada Revenue Agency. Digital copies must be accurate, accessible, and readable. This means they should be clear representations of original paper documents and stored in a format that can be easily opened and reviewed.

Digital records must also be reproducible in hard copy if the CRA requests them. This necessitates secure digital storage solutions, such as encrypted cloud services or external hard drives, along with regular backups to prevent data loss. Ensuring the integrity and accessibility of digital files is as important as managing physical paper records.