Your debit card gets declined, you call the bank and someone tells you the CRA froze the account. That freeze is a legal document called a requirement to pay. It is reversible, and the first 48 hours matter most.
Provisions, CRA policy and the prescribed interest rate below were confirmed against canada.ca on 26 July 2026. Rates are set quarterly and collection outcomes depend on your specific file.
Key takeaways
- A CRA bank account freeze is a requirement to pay issued under section 224(1) of the Income Tax Act. No court order is needed, the one published exception being COVID-19 benefit debt owed by an individual.
- On an ordinary income tax assessment the CRA cannot issue a requirement to pay until after the collection-commencement day, 90 days after the notice of assessment was sent.
- Unremitted payroll source deductions and unremitted GST/HST get no 90-day runway, and for those debts the notice of assessment itself is the written legal warning.
- A CRA legal warning is valid for 180 days, and legal action can start at any point in that window even if the balance changes.
- Interest on overdue tax is 7% for the quarter 1 July to 30 September 2026, compounded daily, so a frozen bank account gets more expensive every day.
Can the CRA freeze my account without going to court?
Yes. The CRA can freeze your bank account without going to court. The CRA's ability to freeze bank accounts comes from section 224(1) of the Income Tax Act, which says the Minister may in writing require a third party to pay. The document is a requirement to pay notice, issued by the CRA straight to your financial institution. No judge, no judgment, no hearing. The CRA's garnishment page lists the legal requirement as no court order required, the one exception being COVID-19 benefit debt owed by an individual.
One correction to what you will read elsewhere. The CRA sends you a copy of the garnishment at the same time it sends one to your bank, so you learn the same day rather than in advance. That does not make a freeze unannounced: CRA policy is to give a legal warning first, at least one attempt at a verbal warning by phone plus a written legal warning letter.
Two scope notes. Section 224(1) covers income tax debt, while a requirement to pay for GST/HST issues under the Excise Tax Act. And not every frozen bank account in Canada is the CRA, because a bank can freeze an account itself after suspicious activity, and a creditor can freeze one once it has won a judgment. Contact your bank first and ask what they are acting on.
Why the CRA freezes bank accounts when you owe money
The CRA generally moves to a freeze at the end of a collection file, not at the start. The usual triggers:
- Unpaid personal or corporate income tax after a notice of assessment
- Unremitted GST/HST or payroll source deductions
- A payment arrangement you agreed to and then missed
- Collection letters and calls that went unanswered
- An audit that produced a balance you have not paid
The pattern behind almost every frozen bank account is the same: unpaid taxes, plus silence. Debts owed to the CRA do not settle themselves.
When can your account be frozen: the 90-day rule before CRA legal action
Under section 225.1 of the Income Tax Act the CRA cannot certify the amount or issue a requirement to pay until after the collection-commencement day, which in the general case is 90 days after the notice of assessment was sent, for any taxpayer including corporations. Some debts sit outside that rule, and this is what catches Durham Region business owners. The dividing line is the type of debt, not the type of taxpayer.
| Debt type | Waiting period | What counts as the written legal warning |
|---|---|---|
| Assessed personal or corporate income tax | 90 days after the notice of assessment was sent | A separate legal warning letter |
| Income tax withheld at source | None | The notice of assessment |
| CPP contributions and EI premiums withheld | None | The notice of assessment |
| GST/HST collected and not remitted | None, payable forthwith | The notice of assessment |
A legal warning is valid for 180 days, and the CRA can start legal action at any time in that window even if the balance changes. Once the 180 days expire with no legal action taken, one further warning, verbal or written, renews it.
What happens when your bank sends the money to the CRA
When the CRA freezes your bank account, none of it is your bank's decision. Your bank must comply, so it freezes the account the day the document arrives and sends the funds in the account directly to the CRA, up to the maximum the requirement to pay states and never beyond the amount of your tax debt.
How much is that? Less certain than the internet suggests. Section 224(3) provides for such amount as is stipulated by the Minister in the requirement, and the CRA says the first page of the garnishment shows the maximum to withhold. Canada.ca publishes no protected minimum balance for bank accounts. You will also see a claim that the CRA garnishes half of your net pay. No primary source supports it. Read your own document, not a blog's rule of thumb.
The published route out is financial hardship. Information Circular IC98-1 says the CRA will usually not withdraw these actions until the account is paid in full, or when the action is shown to be causing financial hardship. Document your financial situation properly and that sentence becomes the spine of your file.
Can a joint account or a business account be frozen?
A requirement to pay names a debtor and a financial institution. If the corporation owes, the corporation's account is exposed. If you owe personally, your chequing account is.
A joint account is the question we get asked most, and the straight answer is that canada.ca publishes no rule for it. The outcome depends on whose debt it is, how the account agreement is written and how the bank responds. Do not assume, and do not move the money out.
If you open a new account at a different bank, that does not fix anything. The CRA can identify a new chequing account and issue a fresh requirement to pay to that financial institution.
What to do in the first 48 hours if your bank account is frozen
- Get the document. Contact your bank first, confirm the freeze came from a CRA requirement to pay and ask for a copy. The first page shows the maximum amount to withhold.
- Contact the CRA on the collections line for your debt type. Personal income tax is 1-888-863-8657. GST/HST is 1-877-477-5068. Payroll is 1-877-548-6016. Corporate income tax is 1-866-291-6346. All four are open Monday to Friday, 8 am to 8 pm ET.
- Leave the money where it is. Shuffling funds after a garnishment lands makes the file worse.
- Pull your file together: every notice of assessment or reassessment, every collection letter and your recent bank statements.
- Bring in a CPA before you negotiate, or a tax lawyer if you intend to dispute the assessment.
How to unfreeze a frozen bank account and clear the tax debt
The freeze holds for as long as the outstanding tax debt does. There are four routes out, and they are not mutually exclusive.
- Pay the balance in full. The fastest release, if the funds sit somewhere the freeze does not reach.
- Set up a payment plan. Payment arrangements with the CRA are the most common route out. Schedule a pre-authorized debit through My Account, My Business Account or Represent a Client, use the automated TeleArrangement service on 1-866-256-1147 (personal income tax debt only, Monday to Friday 7 am to 10 pm ET), or call the collections line for your debt type. Work out the monthly figure first with the CRA's monthly net income and expense worksheet.
- File the missing returns. If part of the balance is an arbitrary assessment for years you never filed, filing often lowers it.
- Document financial hardship. This is the published basis on which the CRA withdraws a collection action before the balance is paid.
Two cautions. Once the debt payments start they have to continue on the agreed dates, and every future return has to be filed on time. An arrangement also does not stop set-off, because the CRA may still use benefits and credit payments to pay your debt. The Canada Child Benefit is the exception: subsection 164(2.2) carves CCB refunds out of the set-off power, and the CRA will not apply CCB payments to other tax or government debt.
If the assessment itself is wrong, the route is a notice of objection and, if needed, an appeal to the Tax Court. If the penalties and interest are the problem, taxpayer relief can cancel those but not the tax, and the CRA posts an average processing time of sixteen months, so treat it as a parallel filing, not a pause button. See our guide to CRA tax relief.
A payroll balance that froze a Whitby contractor's business account
Worked example
A Whitby contractor with six employees remits source deductions monthly. In March a $9,400 remittance went out 12 days late.
- Late-remitting penalty at more than seven days late: 10%, which is $940.
- Interest on the overdue amount: 7% for the quarter 1 July to 30 September 2026, compounded daily.
- Waiting period before a requirement to pay: none. Source deductions sit outside the 90-day rule.
- Written legal warning: the notice of assessment itself. No separate letter was coming.
He assumed he had three months, the way he would on a corporate tax balance. He had none, and by the time the account froze the next payroll run was sitting in it. The fix took one call to 1-877-548-6016 and a pre-authorized debit.
Clean payroll bookkeeping is the cheapest insurance against this.
Where a bigger CRA debt goes next
Three things sit beyond a frozen account, and our guide to CRA collections covers each in full. Ontario's execution exemptions bind the CRA on a direct seizure of goods, though not on a requirement to pay against your bank. The collection limitation period runs ten years, and making a payment can restart it. And if the balance is unpayable, a licensed insolvency trustee is the only professional who can file a consumer proposal, a stay of proceedings that halts collection including tax debt owed to the CRA, so read the thresholds before taking that road for debt relief.
How to keep the CRA from having to freeze your account again
- File every return on time even when you cannot pay. Late filing and non-payment carry separate penalties.
- Remit source deductions on the day they are due. The penalty ladder starts at 3% for one to three days late and reaches 10% past seven days.
- Answer the first collection letter, not the fourth.
- Keep the bookkeeping current and every tax obligation on the calendar, so a balance never surprises you.
- Call your accountant when you see a balance coming, not after the account freezes.
Frozen bank account or a CRA balance you cannot clear? Talk to us
A frozen bank account is not the end of the road. It is a document with a number on it and a process behind it, and both can be worked.
EK CPA Pro represents individuals and business owners across Oshawa, Whitby, Ajax, Pickering and the rest of Durham Region, dealing directly with CRA collections to get accounts released and negotiate payment arrangements. See how we handle CRA and tax matters, read about our work in Whitby, or book a free 15-minute call.
This article is general information current to 26 July 2026, not tax or legal advice. Interest rates are set quarterly and collection outcomes depend on your specific file. Speak with a CPA before acting on a CRA collection matter.
