Paying taxes is a stressful and time-consuming chore most taxpayers would like to avoid. But the Canada Revenue Agency (CRA) has managed to help by introducing a Notice of Assessment (NOA). So, what is an NOA, exactly?
In simple terms, an NOA is an annual statement issued by the CRA that breaks down your income tax and refunds. It’s issued only after your tax return is filed to help you navigate what income tax you’ve already paid, whether you have any tax credits, and more. It’s an incredibly powerful resource you can use to simplify your tax filing.
Let’s take a closer look at how it works.
What is a Notice of Assessment (NOA)?
Each year, the Canada Revenue Agency sends a statement to taxpayers that includes all their income tax details. This statement is called a Notice of Assessment, and it breaks down exactly how much you owe, the tax refund you can expect, and the taxes you’ve already contributed.
The NOA is developed based on the information you submit in your tax return. If you file your taxes electronically, you can expect to receive your NOA in about two weeks after you file your return.
What is the Purpose of an NOA?
The primary objective of an NOA is to ensure the estimate of your tax return aligns with that held at the Canada Revenue Agency. It also confirms that the CRA has received your tax reports.
An NOA is an invaluable tool for taxpayers, as it includes all the details you need to know about your taxes. Such a comprehensive summary of a tax return makes paying your taxes much less stressful. It highlights all gaps, which helps you ensure no critical payments are delayed.
What is Included in an NOA?
You can find the following information on your NOA:
Account summary: This is the description of your tax return, both assessed and reassessed, which results in either a refund, zero balance, or balance owed. Your account summary also covers any outstanding balances left from previous years.
Tax assessment summary: This section covers the key lines of your assessed tax return. For example, if your GIC generates taxable returns, those returns will be included in the NOA under income. The summary also includes the specific numbers used to estimate your balance. Note that it’s your responsibility to analyze your tax assessment summary and compare the numbers mentioned on the NOA to your tax return. If you notice any discrepancies, inform the CRA.
Changes break-down: Here, you can see the changes made to your tax return after the Canada Revenue Agency has assessed it. These adjustments follow the information submitted on your tax return and the records the CRA has on file. If you disagree with the received information, you have up to 90 days from the date of your NOA to dispute it.
RRSP deduction limit: This section illustrates how the deduction limit for your Registered Retirement Savings Plan (RRSP) was estimated. This number is what you can deduct on next year’s tax return,
TFSA contribution room: Your NOA indicates the available contribution room in your Tax-Free Savings Account (TFSA), assisting you in planning your upcoming contributions.
HBP statement: Your NOA includes the statement of the remaining balance within your Home Buyer’s Plan (HBP) and specifies the minimum payment required for the upcoming year.
LLP statement: Your NOA shows the remaining balance and the minimum payment within your Lifelong Learning Plan for the next year.
When Can You Get Your Refund After Receiving Your NOA?
Once you receive your NOA from the Canada Revenue Agency, you can get any refund you’re entitled to. In most cases, your refund will be provided alongside your NOA. However, if you’ve set up a direct deposit, your refund will be deposited to the account the CRA has on file for you.
If you’re a Canadian resident, you’ll receive your data within two weeks (for online applications) or eight weeks (for paper returns). Note that non-resident returns take longer to get processed — up to 16 weeks.
How to Change Your Tax Return
Suppose you file your tax return only to realize that you must make some adjustments. Is it too late? Don’t worry. If such a situation unfolds, wait until you get your NOA before asking for any changes.
Remember: You don’t have to file another tax return for that same year. You have the chance to modify the already submitted reports using one of the strategies described below:
Change my return: Submit an online request via the “Change my return” option in My Account on the CRA’s official website. My Account is a safe service that allows you to review your income tax and other pertinent information electronically. Once you sign in to your account, you can use the “Change my return” option to request to make relevant tax-related changes for the previous 10 calendar years.
ReFILE: If you’ve filed your income tax return online, you can use the ReFILE service. It’s an online service that allows taxpayers to request adjustments. Remember to use the same certified NETFILE software you used when submitting your income tax. You may use this service to provide additional information, detect errors, and issue supporting documentation to back up your request.
Submit a mail request: This option allows you to request tax return adjustments via mail. To do this, you have to gather several documents. These include a completed T1 Adjustment Request form and any supporting documentation to substantiate your changes. The T1 Adjustment Request form must clearly outline the specific changes you want to make to your tax return, along with the amounts to be corrected and supporting documentation.
In most cases, you’ll receive the CRA’s response (notice of reassessment) within two or eight weeks.
What to Do if You Disagree with Your NOA
Upon receiving your NOA, you might disagree with the changes made to your return and account. If that’s the case, contact the Canada Revenue Agency and submit a formal objection. Filing an objection leads to your tax return being reviewed or determined. To proceed with the process, follow the steps listed below:
Contact the CRA: Your NOA includes the CRA phone number. Contact the Agency to discuss the situation and avoid potential misunderstandings. Speaking to the CRA should clarify things and help you decide whether to proceed with the next step, i.e., filing the formal objection.
File a formal objection: If you’ve contacted the CRA and aren’t satisfied with the results, consider filing a formal objection using the T400A form. Here, you’ll have to provide reasons for the dispute supported by relevant documentation. If this step seems confusing, consider hiring a tax expert to assist in preparing a well-articulated notice of objection.
Appeal to the Tax Court of Canada: Finally, if you’re dissatisfied with the CRA’s decision regarding your objection, you have the legal right to appeal to the Tax Court of Canada.
Conclusion
Canadian taxpayers greatly appreciate the Notice of Assessment. This annual statement clarifies your income tax and tax refunds, helping you navigate what income tax you’ve already paid, whether you have any tax credits, and more. Remember, if you disagree with any aspects highlighted on your NOA, you have the right to file a notice of reassessment to resolve any issues.