Received a CRA Notice of Assessment? Here’s What to Do

Receiving a Notice of Assessment (NOA) from the Canada Revenue Agency (CRA) can be a nerve-wracking experience. Whether it confirms your tax return was accepted with no changes, shows you owe additional taxes, or adjusts your refund amount, understanding how to interpret and respond to your NOA is essential for managing your tax affairs effectively. This detailed guide explains what a CRA Notice of Assessment is, how to read it, common reasons you might receive one, and the steps you should take after receiving it.

1. What Is a CRA Notice of Assessment?

A Notice of Assessment is the CRA’s official statement of the results of processing your income tax return. It summarizes:

• Your total income
• Taxable income
• Total taxes owed
• Amounts paid or credited
• Your refund or balance owing
• Any changes or corrections made by the CRA

The NOA serves as confirmation that your return has been processed and details your current tax account status.

2. How to Read Your Notice of Assessment

Your NOA contains several key sections:

• Identification and Tax Year: Confirms the taxpayer and the tax year assessed.
• Summary of Taxable Income and Taxes: Shows income reported, deductions, credits, and tax calculations.
• Balance Owing or Refund: Indicates whether you owe money or will receive a refund.
• Carryforward Amounts: Such as unused RRSP contribution room, tuition credits, or capital losses.
• Other Important Messages: CRA notes, next steps, or adjustments.

3. Common Reasons for Receiving a Notice of Assessment

• Standard Confirmation: Your return was accepted as filed.
• Adjustments by CRA: Corrections to reported income, deductions, or credits.
• Balance Owing: Additional tax payable due to errors, missing information, or audit findings.
• Refund Issued: CRA confirms the amount of refund.
• Audit or Review Notification: Indicates further review or audit may be initiated.

4. What to Do When You Receive Your NOA

4.1 Verify the Details

Check that your personal information, reported income, deductions, and credits match your records and tax return. Confirm the refund or balance owing amount is accurate.

4.2 If You Agree With the NOA

If you agree with the assessment, and you owe taxes, pay the amount due by the deadline (usually April 30) to avoid interest and penalties. Refunds are usually issued shortly after the NOA.

4.3 If You Disagree With the NOA

If you believe the CRA made a mistake or adjusted your return incorrectly:

• Contact the CRA: Call the number on your NOA for clarification.
• File a Notice of Objection: Form T400A lets you formally dispute the assessment within 90 days of the NOA date.
• Gather Documentation: Collect receipts, slips, and supporting evidence to back your position.

5. Paying a Balance Owing

CRA offers several payment options:

• Online banking or CRA My Payment
• Pre-authorized debit
• Credit card (through third-party providers)
• Cheque or money order

If you cannot pay in full, contact the CRA to arrange a payment plan and avoid collection actions.

6. Understanding Interest and Penalties

Interest is charged daily on any unpaid balances starting from the due date. Late-filing penalties apply if you file late and owe taxes:

• 5% of balance owing plus 1% for each full month late, up to 12 months
• Higher penalties if you have a history of late filing

7. Using CRA My Account

Registering for CRA My Account allows you to:

• View your NOAs and other tax documents online
• Check your balance and payment history
• Update personal information
• Make payments and set up direct deposit

8. When to Seek Professional Help

If your NOA is complex, involves large adjustments, or you face a Notice of Reassessment or audit, professional advice can help you:

• Understand your rights and obligations
• Prepare and file objections or appeals
• Negotiate payment arrangements or relief