As if just filing your taxes isn’t stressful enough, not to mention you're also juggling your business, investors, family matters, maintaining a social life, and even getting to that spin class you were supposed to attend—your Notice of Assessment arrives. Great. What now?
We know what’s going through your mind, which is why we’re here to help clarify the process.
What is the CRA Notice of Assessment?
Once the Canada Revenue Agency (CRA) completes a preliminary review of your filed tax return, a Notice of Assessment (NOA) will be sent to you confirming that your tax return was either assessed as filed or identify adjustments made.
The Notice of Assessment, also known as form T451, includes:
Refund or balance owing
Any corrections made as well as if you’re receiving money back or if you have a balance owing is included here.
Your total household income
Line 150 shows your taxable income, which can be used to determine if you’re eligible for several programs. (i.e. When you’re requesting a loan or mortgage, this is generally the amount that your bank will ask for as a proof of income).
Application for a GST/HST rebate
The CRA informs you of any corrections that have been made on your rebate application.
Your allowable Registered Retirement Savings Plan (RRSP) contributions and Tax-Free Savings Account (TFSA) limit for the current year
Find out the maximum amount you can contribute to your RRSP, as well as your TFSA contributions, withdrawals, and any unused contributions you can add to max it out.
Repayment required for the Home Buyers’ Plan
If you’ve benefited from a home buyers’ tax deduction and have withdrawn money from your RRSP for the Home Buyers’ Plan, your NOA indicates what you need to repay in the current tax year.
Tuition, education, and textbook carry forward amounts
As part of tax deductions specifically designed for students, you can carry forward this amount indefinitely if you do not need the full tuition, education, and textbook amounts to reduce your tax payable to zero.
Unused net capital losses:
You can carry the unused net capital losses back three years and forward indefinitely to be applied against capital gains.
For example, the unused capital losses and tuition/education credits come in handy if you anticipate a much higher income the following year, such as starting a new job after graduation. Because those amounts can be carried forward, be sure to keep the Notice of Assessment you receive in a safe place to refer back to when you prepare next year’s returns! Want to find out if you’re eligible for reducing the amount of tax you have to pay? The CRA lists deductions and credits you can claim.
I haven’t received my CRA Notice of Assessment. How do I get it?
Simply log into My Account for Individuals or the MyCRA mobile app to view and print your notices of assessment and reassessments. Keep in mind you can access, view and print detailed summaries of your notices only as far back as three years (those processed after February 9, 2015) through your mobile app. Alternatively, you can call 1-800-267-6999 to locate the notice.
I noticed a discrepancy on my Notice of Assessment? What do I do?
Unfortunately, discrepancies are not an uncommon ordeal between income tax returns and CRA tax assessments. Once you receive your NOA from the CRA, you should always compare the notice against calculations on your filed T1 or T2 income tax return. If you really find that you disagree with the CRA’s tax assessment, you can follow these procedures:
- Call or write to the tax centre that processed your return—most smaller, more common issues are resolved easily this way.
- If the issue continues to be unresolved, know that you have the right to appeal the NOA by filing an objection.
Okay, so how do I appeal my Notice of Assessment from the CRA?
If you've reached this scenario, you're likely either:
1) Disagreeing with the CRA assessment of taxes owed or;
2) Developing a dispute over how the CRA has interpreted the income tax law. (Remember, the CRA is always right and you are wrong unless the records you’ve stored away prove otherwise).
To appeal a CRA income tax assessment, you must file a notice of objection either within one year from the filing deadline of the tax return in question, or 90 days of the CRA mailing your Notice of Assessment (whichever one is later), explaining why you disagree and any relevant facts and documents about your case.
If you’re not sure how or where to go about doing so, don’t worry—we’ve got you covered!
You can choose one of these three options:
- Use CRA Form T400A, Objection - Income Tax Act
- Go on the CRA website to access My Account for Individuals and select “Register my formal dispute” or use the online services My Business Account and select “Register a formal dispute (Notice of Objection)
- Send a letter directed to the Chief of Appeals at the appropriate CRA Appeals Intake Centre
If the appeal works out in your favour—either completely or partially—the CRA will adjust your tax return and send you a revised Notice of Assessment. Otherwise, you’ll receive a written notice confirming the original tax assessment.
What if the CRA rejects my appeal?
If you receive the CRA’s decision on your objection and disagree, you can then appeal to the Tax Court of Canada. If the result is unsuccessful, the next step is to take it to the Federal Court of Appeal and ultimately, to the Supreme Court of Canada.
Keep in mind the entire appeal process is the worst case scenario. Most small business owners like yourself don’t ever have to reach this stage, as long as you regularly keep your books organized either using a software or with professional help!
Kashoo makes it easy to manage all your expenses, income, and receipts so that you’ve got no worries come tax season. Get a head start for 2019, and start organizing your books today. Get started for free right now.