Everything You Should Know About Notice of Assessment

You think you have done your job after organizing paperwork, performing calculations and filing taxes on time? Your taxes for the year are not done until you receive your Notice of Assessment from the CRA.

What is a Notice of Assessment and Why Should I get it?

Regardless of how you filed your taxes (an accountant or yourself), you must receive a Notice of Assessment (NOA) from the Canada Revenue Agency (CRA). Basically, when CRA receives tax returns, it assesses or reviews the numbers and sends back an NOA as a confirmation that they have received and assessed your taxes.

A NOA can be handy for various reasons. For example, it explains how your return was calculated by the CRA. It also provides detailed information related to the tax amount you owe to tax authorities or the refund amount if they owe you. It is quite possible that their numbers might differ slightly from yours. In such instances, any changes made by CRA are also explained in the NOA.

Undoubtedly, NOA contains a lot of valuable information. Before you consider your taxes done, make sure you are aware of the following.
When should I expect my NOA?

NOAs can show up within a few weeks after your returns have been assessed. Your NOA will arrive along with the refund check if you are eligible for a refund. However, if you are not eligible for a refund or you have already set up direct deposit then NOA will arrive as separately.

Log in to My Account Portal on the CRA website to print your current records in case you have not received NOA within the stipulated time period.

What to do if CRA made changes to my returns? Should I be worried?

Taxes are complicated, and it is common for mistakes to occur even after thorough checking. For example, you may claim something that you are not eligible for and forget to claim the applicable amount, such as the Canada Employment Amount. NOA will show these changes and relevant explanations.

Usually, CRA does not need actions at your end after it has made changes. However, it will inform you of any interest or penalties as a result of changes.

The changes made in my NOA are confusing

It is possible that CRA explanation present on your NOA may not make much sense as it is computer generated and in a standardized form. But you don’t have to worry. Simply call CRA to understand the meaning of such changes.

What does the date on NOA mean?

You need to pay attention to it. The date is important because it is the deadline in case you wish to object the changes made by the CRA. This date is also treated as the start of the 3-year period in which the CRA may choose to re-assess your filed returns. Once this (3-years) period is expired, the CRA may still reassess your returns but only in cases if it doubts you committed a fraud or you were negligent in your preparation of returns.

How this year’s NOA may help you in next year

Your current year NOA can be very handy at the time of filing next year’s returns. So make sure it is placed somewhere safe and accessible. Your NOA contains your annual Registered Retirement Savings Plan contribution limit and your limit related to Tax-Free Savings Account (TFSA). The annual contribution limit for TFSA is present in summary report of NOA even though you do not have to report TFSA on income tax form.

Your NOA will also contain carry forward amounts, such as education credits, capital losses, and unused tuition. Similarly, information related to home buyers’ plan (HBP) balance and repayment data is also included on NOA for future use.

Where to keep my NOA?

Place your NOA somewhere you keep important legal and official documents. It can be a folder, a drawer, a closet or a separate tax envelope. Make sure to keep it at a place where it is easily accessible and safe as NOA may be used for various other purposes as well. For example, financial institutions usually ask for your NOA copy to prove your income when applying for a loan or a mortgage. Some social programs also need NOA in order to ascertain previous year annual income.

What if I lost my NOA?

If you have lost your NOA or cannot find it, you may ask important information, such as RRSP contributions and carryforwards, from the CRA. You may also access this information by signing up for CRA’s My Account Services.

Note: If you have any questions or concerns about your NOA, contact us at (416) 932-1915 or email us at [email protected]

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