How to File a Deceased Person’s Final Tax Return in Canada

The final return is a regular T1, marked “Deceased” with the date of death at the top, reporting income from January 1 to the day the person died. It is due April 30 of the following year, or six months after the date of death where death occurred between November 1 and December 31. Death also triggers a deemed sale of almost everything the person owned, so capital gains and the full value of any RRSP usually land on this one return.

Before distributing a single dollar, the executor needs a clearance certificate on Form TX19. This guide walks through the sequence.

What the Final Return Actually Covers?

The form itself is familiar. A final return uses the standard T1 for the year of death, with the word Deceased and the date of death written across the top, and the legal representative signs it rather than the taxpayer. Our step by step guide to personal tax returns in Canada covers the mechanics of the form that still apply.

Two things make it heavier than an ordinary return. Subsection 70(5) treats the person as having sold every capital property at fair market value immediately before death, so unrealised gains on a cottage, a rental, a stock portfolio, or a business interest all become taxable in that final year. Our guide to deemed disposition rules in Canada sets out how the calculation works.

Registered accounts compound it. The full fair market value of an RRSP or RRIF becomes income on the final return unless the plan rolls over to a surviving spouse or a financially dependent child, and our guide on what happens to your RRSP when you die in Canada covers those exceptions. A $400,000 RRIF plus a $300,000 gain on a cottage can push an estate into the top bracket on a single return.

Final Return Deadlines in Canada

The deadline depends on when in the year the person died and on whether they ran a business.

Date of Death	Filing Deadline	Payment Due
January 1 to October 31	April 30 of the following year	April 30 of the following year
November 1 to December 31	Six months after the date of death	Six months after the date of death
In business, died January 1 to December 15	June 15 of the following year	April 30 of the following year
In business, died December 16 to December 31	Six months after the date of death	Six months after the date of death

Note the split in the third row. A self employed person’s return gets until June 15, but the money is still due April 30.

How to Become CRA’s Authorized Representative?

Nothing can be filed until CRA recognises you. Start by notifying CRA of the death by phone or in writing, which stops benefit payments such as the GST and HST credit and the Canada Child Benefit from continuing and later being clawed back from the estate.

Send the supporting documents next. CRA needs a copy of the death certificate plus proof of your authority, meaning the will naming you as executor, or a court appointment where there is no will, or a signed statement from the next of kin where no will and no court appointment exist.

Register for online access once the paperwork is accepted. Form AUT-01 or the Represent a Client service gives you access to the slips CRA holds, which matters because the deceased person’s T4s, T5s, and T3s are often the only reliable record of what they earned. Our comparison of T4 vs T4A vs T5 slips explains which form reports what.

Income That Belongs on the Final Return

Report everything earned up to and including the date of death. That covers employment income to the last day worked, which goes on line 10100 of the tax return, along with CPP and OAS payments received, pension income, interest accrued to that date, and dividends declared before it.

Capital gains from the deemed disposition sit alongside it. A principal residence can still be exempt where it qualified, so the executor files Form T2091(IND) to designate it, and our guide to capital gains tax on real estate in Ontario covers the provincial side of the bill.

Two items do not belong here, and executors get both wrong. Income earned after the date of death belongs to the estate and goes on a T3 trust return, not on the T1. The CPP death benefit, a lump sum of up to $2,500, is never reported on the deceased person’s return either. It is income of the estate where the estate received it, or of the beneficiary who received it personally.

Three Optional Returns That Can Cut the Tax

Beyond the final return, the Income Tax Act allows up to three separate elective returns, and each one carries its own full set of personal credits.

1. The Rights or Things Return

Subsection 70(2) covers amounts earned before death but unpaid at that date: a final paycheque, declared but unpaid dividends, matured bond coupons, uncashed vacation pay. These can come off the final return and go on a return of their own.

The split is the point. Each return gets its own basic personal amount, which is $16,452 federally at the top for 2026, and its own run up through the tax brackets. Moving $20,000 of unpaid salary onto a separate return can shelter most of it. The deadline is the later of one year after the date of death or 90 days after CRA mails the notice of assessment for the final return.

2. The Business Income Return

Where the deceased was a sole proprietor or a partner with a fiscal period that did not end on December 31, subsection 150(4) allows the business income from the stub period after the fiscal year end to be reported separately.

Filing and payment deadlines for this one match the final return rather than running on their own clock. The same credit stacking applies, so a business owner with income in both periods can split it across two returns instead of piling it into one.

3. The Graduated Rate Estate Beneficiary Return

Where the deceased was a beneficiary of a testamentary trust whose tax year ended after the date of death, paragraph 104(23)(d) allows that trust income to be reported on a separate return.

This one applies less often, but it is worth checking in any estate where the deceased was receiving income from a parent’s trust. Missing it means the trust income stacks on top of everything else in the final year.

Deductions Available Only on a Final Return

Three reliefs exist that no ordinary return gets. Medical expenses can be claimed for any 24 month period that includes the date of death, double the usual 12 month window, which often captures a long final illness in full.

Capital losses get better treatment too. Net capital losses that would normally only offset capital gains can be applied against any type of income on the final return and on the return for the year before it, under subsection 111(2). An estate with large losses and large pension income can use one against the other.

Charitable giving is the third. Donations made under the will are treated as made by the graduated rate estate, and the estate can allocate them to the final return, the year before, the estate’s own returns, or carry them forward five years. Pension income splitting with a surviving spouse also remains available in the year of death. One of the most common estate planning mistakes is leaving these elections unclaimed, and families usually catch them only with help from estate planning in Toronto.

Why You Need a Clearance Certificate Before Distributing?

Form TX19, Asking for a Clearance Certificate, confirms that every return has been filed and every amount paid. The executor files it after the final return and any optional returns have been assessed and the balances settled.

Distribute without it and you take on the risk personally. An executor who hands assets to beneficiaries and is later assessed for additional tax can be held personally liable up to the value distributed, with no practical way to recover the money from people who have already spent it.

Build the wait into your timeline. CRA typically takes two to four months to issue a clearance certificate, and longer where the estate holds a business or foreign property. Submit the death certificate, the will, a list of assets and their values, and the proposed distribution to beneficiaries with the request. Executors handling this in Alberta work through estate planning in Calgary, where provincial probate rules differ from Ontario’s.

File in the Right Order and Protect Yourself

Sequence is what keeps an estate out of trouble. Notify CRA, register as representative, pull the slips, file the final return by its deadline, consider the three optional returns, file a T3 for income after death, then request the clearance certificate and only then distribute. Skip a step and the problem usually surfaces months later as an assessment addressed to you personally.

Give the valuation work proper attention early. Deemed disposition needs a fair market value at the date of death for every capital property, and a real estate appraisal or a dated portfolio statement is far easier to obtain in the first few months than two years later when CRA asks for support.

Tax Return Filers PC prepares final returns, optional returns, and clearance certificate requests, alongside personal income tax in Mississauga for surviving spouses whose own return changes in the same year.