You received your CRA Notice of Assessment. Now what?

Last updated: Jun. 8, 2023 

After you prepare your tax return and file it, 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 a Notice of Assessment (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 “CRA 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 — contact the CRA at 1-800-959-5525 (for businesses).

What if I have discrepancies on my NOA?

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 have a balance owing or that 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, or run your business as a sole proprietor, you and your spouse have until June 15th every year to file your returns, but the CRA will still charge interest on any payments not received by April 30th.

If you file late, you will also be charged late-filing penalties.

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.

How do I object to my Notice of Assessment from CRA?

To object to a CRA income tax assessment, you must file a notice of objection. Typically, the basis for an objection is a disagreement with the CRA assessment of taxes owed or a dispute over how the CRA has interpreted the income tax law.

To file your objection, choose one of these options:

• File an objection online through CRA My Account (choose My Business or Individual depending on your situation). Choose “Register my formal dispute”. You will receive a case number that you will need to refer to when submitting supporting documentation or for further correspondence with the CRA.
• File through your authorized representative. They will use Represent a Client to file the dispute on your behalf.
• File by mail or fax using CRA Form T400A, Objection – Income Tax Act
• Send a letter to the Chief of Appeals at the appropriate CRA Appeals Intake Centre

You’ll need to explain why you disagree your assessment and include all relevant facts and documents.

What is the deadline for filing an NOA objection?

Individuals must file their objection by whichever of these two dates is later:

• one year after the tax filing deadline for the return; or
• 90 days from the date of your notice of assessment or determination.

If your objection is concerning tax-free savings account (TFSA) or registered retirement savings plan (RRSP contributions), the deadline is 90 days from the date of your notice of assessment.

Incorporated businesses must file 90 days from the date of the notice of assessment or determination.

If you did not file your objection on time, you can apply for an extension. The Chief of Appeals will consider the circumstances behind your missing the deadline, including if you were working with the CRA office responsible for sending your assessment before you filed the objection or for reasons beyond your control, you can apply for an extension.

You can file for an extension at the same time as you file your notice of objection. You can apply for an extension up to one year after the deadline for filing an objection by writing to the Chief of Appeals at your Appeals Intake Centre.

What happens after I file my objection?

Objections are handled on a case-by-case basis and the length of time it takes to process your objection depends on its complexity and how long it takes for you to respond to any requests for information.

If CRA agrees with your objection, either completely or partially, it will adjust your tax return and send you a revised Notice of Re-Assessment. Otherwise, you’ll get written notice confirming the original tax assessment.

If you disagree with the CRA’s decision on your objection, you can appeal to the Tax Court of Canada.

If your case is unsuccessful in the Tax Court, you could take it to the Federal Court of Appeal and, ultimately, apply for leave to the Supreme Court of Canada.

The whole appeal process can be daunting and requires a lot of time and expense if you handle it alone.

Do I have to pay the tax I’m objecting to?

Generally, you do not have to pay the income tax amounts that are under review until the CRA has completed its review of your objection.

You do however, have to pay if the amounts you are objecting to are taxes you had to withhold and remit, such as payroll taxes.

If your objection relates to a charitable donation tax credit, you have to pay half of the amount in dispute. You should confirm this with the CRA beforehand.

When a decision has been made on your objection, you must pay any the amounts you owe, including taxes, penalties and interest.

If the review is ruled in your favor, you can ask the CRA to refund the amount if:

• you already paid your amounts owing; and
• you have not received a decision on your objection within 120 days.

 

You’ve done the work, you’ve filed your taxes, so what happens now?  [Free Download]

Download our free 23-page guide to learn how to read your personal or corporate Notice of Assessment, the most common audit triggers for Canadian farmers and business owners, the CRA audit selection process, how to survive an audit if you happen to be chosen for one.  We’ve also included some bonus information for our incorporated business readers on the Corporation Assessing Review Program (CARP).

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