The Notice of Assessment is the form the Canada Revenue Agency (CRA) issues to all Canadian taxpayers after processing their tax returns. This CRA tax assessment summarizes the results and states the amount of taxes to be paid or refunded. The Notice of Assessment includes the amount of tax refund, tax credit, and income tax already paid, as well as a list of deductions. A detailed review of key sections follows.
Explanation of Changes and Other Important Information
If the CRA made any corrections to your income tax form or goods and services tax (GST) and harmonized sales tax (HST) rebate application, this section explains what changes have been made. Also listed are important changes for the upcoming tax year and any other issues relevant to your tax situation, such as:
- Reminders about installment payments
- Information about unused capital losses
Registered Retirement Savings Plan Deduction Limit Statement
This section summarizes your Registered Retirement Savings Plan (RRSP) contributions for the tax year, including any unused contributions, which are carried over into the next tax year. It also shows your RRSP deduction limit—the maximum you can contribute to an RRSP—for the next year, based on information the CRA has compiled from tax returns filed in previous years.
The assessment summary shows a line-by-line summary of your tax return, including total income, tax payable, and whether you have a refund or balance owed. The following example shows a refund of $3,538.02 owed to the taxpayer:
|Deductions from total income||$17,356|
|350||Total federal non-refundable tax credits||$2,965|
|6150||Total British Columbia non-refundable tax credits||$1,119|
|420||Net federal tax||$3,655.16|
|421||CPP contributions payable||$4,712.40|
|428||Net British Columbia tax||$1,094.42|
|437||Total income tax deducted||$0.00|
|476||Tax paid by installments||$13,000.00|
|(Total payable minus total credits)||$3,538.02|
|Balance from this assessment (CR)||$3,538.02|
Disputing Your Assessment
If you disagree with the Notice of Assessment you have received, you can contact the CRA. If the matter is still not resolved, you can make a formal objection, as long as you do so within 90 days of the date of the Notice of Assessment. This can be done online at My Account, or My Business Account if you are a corporation. Select "Register my formal dispute." Note that you will have to provide an explanation of why you disagree with the assessment, including any supporting documentation. You do not have to pay any disputed tax owed until the CRA completes the review process.
Obtaining a Notice of Assessment
There are three ways to get the Notice of Assessment:
- By regular mail, if you have not registered for online mail.
- Online via the CRA's My Account service, where you can view the status of your return and the Notice of Assessment when it is available. My Account also allows you to update your profile such as changing your contact information, or adding or editing direct deposit information.
- By using the MyCRA application from a mobile device. MyCRA also allows changes to personal information and other viewing and editing options.
The CRA may at any time before or after issuing the Notice of Assessment request additional information to support your claims for income and expenses. For example, if you filed online, you may be requested to provide receipts in support of claims for business or medical expenses. If you cannot provide supporting documentation, the CRA may reassess your tax return.
In some cases, the CRA may decide to conduct an audit of your business or personal finances. It can occur if they suspect that you have under-reported income or over-reported expenses. Also, in many cases, you may be randomly selected for an audit either individually or as a member of a targeted business group.
An audit consists of a full-scale examination of the revenue and expenses you—and possibly your spouse—have declared on your tax returns. You must retain your tax records and supporting documents for six years from the end of the current tax year. If the audit reveals discrepancies in your tax returns, you can be reassessed for current and prior tax years.