After you file your tax return, you’ll be issued a Notice of Assessment (NOA) from the Canada Revenue Agency (CRA). We provide some tips below on what to look for when you receive your NOA, common discrepancies between your NOA and tax return and how to handle them.
What is an NOA?
The NOA is an annual statement that lets you know how much income tax you owe (or how much your tax refund will be). It also lists important details like your RRSP deduction limit, and carry over amounts for next year’s return, like unused tuition, education credits and capital losses.
How do I view my NOA?
If you submitted your tax return through Netfile, the CRA’s electronic tax filing service, it’ll take about two weeks for you to see your NOA in My Account, the secure online portal where you can view your personal income tax and benefit information.
If you feel you should have received your NOA — but haven’t — call the CRA tax information phone service at 1-800-267-6999.
I have my NOA. Now what?
Always compare your NOA against the calculations on your filed T1 or T2 income tax return and see if there are any changes. There are a few common reasons for discrepancies:
1. Your tax payment hasn’t been processed yet
You already paid your tax bill, but your NOA says you owe interest.
First step – don’t panic.
The NOA is computer generated, which means payments sent with your tax return may not be reflected immediately on the NOA.
For example: let’s say you owed the CRA $10,000 this year.
You paid the amount on April 30th, but since the CRA hasn’t processed your payment yet, the $10,000 is still sitting in your unallocated payments account and hasn’t been applied to the amount you owe. The computer that reviews your tax return won’t know you owe the money until after it completes the NOA — so it marks the amount as missing.
If your payment hasn’t gone through and they processed the return, they’ll send you a bill for the entire amount owing plus interest. So you could be paying several hundreds of dollars of interest that you don’t owe.
If you are self-employed, you have until June 15th every year to file your return, but the CRA will still charge interest on any payments not received by April 30th.
At the top of the NOA there’s a statement that says you need to pay what you owe, minus any amounts you paid they haven’t processed yet, but it’s very common for people to miss this and pay anyway.
2. You are missing a tax slip
Sometimes you miss a tax slip that includes both income reported and income taxes deducted (like a T4A pension slip).
If CRA added the slip later, they may add the income without adding the Income tax deducted. Always check that all amounts have been added.
3. A number was misreported on the tax return
Let’s say you have investment income from a T5 slip. If you type in $550 instead of $5500, a common mistake, the computer system will add the full $5500 instead of just the $4950 you missed — and charge you tax again on the $550 you already reported.
You can always request CRA to send you a copy of a slip if you didn’t receive it from your bank, financial institution or employer. Don’t be afraid to ask so you can compare numbers.
What if there’s a discrepancy?
If you think you’ve been accessed incorrectly by the CRA, call them for an explanation of changes that have been made.
If you have a tax preparer that is authorized to contact CRA on your behalf, they can do this for you.
For example, if you called the CRA about the interest owing even though you already paid, this can usually be handled over the phone.
You can also file an adjustment request and the CRA will issue a Notice of Reassessment showing any changes to your return.
If your adjustment request is not approved, you’ll receive a letter of explanation from CRA.
Filing an objection
If they didn’t make the changes, you have the right to appeal the Notice of Assessment by filing an objection. You must file your notice of objection within one year from the filing deadline of the tax return in question, or 90 days of the CRA issuing your NOA, whichever is later.
You’ll need to explain why you disagree with the NOA and include all relevant documents to back up your claim. It’s a complicated process, so if it comes to filing an objection we recommend choosing a qualified tax professional to handle this on your behalf.
Disclaimer: The material above is provided for educational and informational purposes only. Always consult a tax professional like FBC regarding your specific tax situation.