Uncashed cheque expiry

[jorge20alarcon]

Hi. I did a search here but couldn't find an answer.
Does cheque not deposited have a expiry?
How long can I keep an uncashed cheque in my drawer for just a future deposit?

Thank you.

 

[athanasius1007]

@jorge20alarcon Typically, 6 months.

 

[jorge20alarcon]

@athanasius1007 Who does it depend from?
The emitter bank or the bank in which it will be deposited?

 

[athanasius1007]

@jorge20alarcon Only government cheques don’t stale date after 6months.

A normal cheque can go bad prior to 6 months as well if the payer no longer has the funds in their account.

If your cheques are old, contact the issuer and ask for new cheques.

 

[imogen88]

@athanasius1007 Clarification: only government of Canada cheques never stale date. Provincial government cheques follow the normal 6 month rule.

 

[imogen88]

@jorge20alarcon It’s the standard set by the Canadian Payments Association. All cheques, except government of Canada, stale date at 6 months. I’ve let a couple be cashed at 6 months + 1 day.

https://www.payments.ca/payment-res.../business-guides/issuing-or-receiving-cheques

 

[gisellemartinez1]

@jorge20alarcon Legally, a cheque never expires but that doesn't translate into it being always payable.

Payments Canada rules state that a cheque is stale-dated after 6 months.

Who does it depend from? The emitter bank or the bank in which it will be deposited?

Either or both. The bank where the deposit is made (called the "negotiating institution") can refuse to negotiate any cheque, so refusing a stale-dated one is completely at their discretion. The bank on which the cheque is drawn (the "issuing institution") may, at their option refuse ("dishonour") and return the cheque through the clearing system for the reason "stale dated". If they choose to do this, they must do so no later than 1 business day after they receive it.

Stale dated cheques may be negotiated and paid if both institutions agree.

The underlying debt represented by the cheque is subject to the statute of limitations in each province, which is 2 years for most (including ON, BC, AB, SK) but 6 years in some (MB and the Maritimes).

 

[dom_williams]

@jorge20alarcon So it's stale dates after 6 months (unless federally issued). But in my experience the best thing to do is deposit it in the machine. The automated process will not stop it due to it being stale. Unless a stop payment or some has happened.

Wait a week or so before touching the funds but I worked at a big bank for years and many seniors write cheques as gifts and years later people deposit sometimes screwing that person. But even though a cheque is stale if it goes through the payment is not reversable. A teller will catch the 6 months but machine generally won't (unless flagged for other reason).

 

[victoryinchrist]

@jorge20alarcon 6 months from the issue date .

 

[snflwrgrl]

@jorge20alarcon Just curious. Why would you keep a cheque for future deposit ?

 

[jorge20alarcon]

@snflwrgrl So I don't need to pay the income taxes immediately

 

[unseensaviour]

@jorge20alarcon Why would you have to pay or not pay income tax? You've likely already either earned the money or realized the capital gain if you have a cheque. Leaving the cheque in the drawer doesn't change that.

 

[gisellemartinez1]

@jorge20alarcon That's not how that works. Income is earned when you are paid, in this case with a cheque, not when you deposit the cheque.

 

[tythomasjr]

@jorge20alarcon This is not the USA where you can do that. Canada has specific rules concerning the taxability of payments. You have heard of people doing that, but didn't check what country they are in.

In Canada...

For employment income, the tax liability occurs when the issuer pays. For a cheque, that happens when written, or dated, or sent, whichever is first.

For contract payments, the tax liability occurs when the work is performed, the invoice is raised, or payment is made. Please notice that, in the event of a deposit, payment is made before the work is performed.

 

[jorge20alarcon]

@tythomasjr But in case it's something I've sold like a gamar laptop or a bed?
It's income or I don't need to pay taxes over it?

 

[tythomasjr]

@jorge20alarcon Really????

Is this a used item? Did you sell it for more than it cost you originally?

Your comment suggests that neither are new. For most cases, people are selling those items to get them out of the house.

Frankly, if this is an occasional thing, you are overthinking this way too much. Just cash the cheque.