You’ve filed your taxes for the year, and now just wait for the notice of assessment to arrive. Many people just ignore this notice until the next tax year, or their mortgage comes due. Your Notice of Assessment has a lot of information in it that could help you to understand your tax filing, your carry forwards for the next year, and any issues that may have turned up with your tax filing. You should keep your notice of assessment for at least 6 years, along with your other tax filing records for that year.
The picture above of the revised notice of assessment that the Canada Revenue Agency will start sending out in February 2016. It includes four notes explaining how the notice’s contact information, account details, key information, and account summary are simplified and easy to understand. The four notes read:
- “1. Contact info – Appears in the top left corner”
- “2. Notice Details – Organized so you can easily identify your notice details”
- “3. Key info – Provides your most important information and if any actions are required”
- “4. Account summary – Provides you with a status of your account and useful tips”
The Sections of the Notice Explained
Account Summary
The account summary section on your notice shows you the result of the assessed or reassessed return. The result may be a refund, a zero balance, or a balance owing. The amount shown in the account summary also includes any outstanding balances you owe from previous returns.
The account summary may also show the result from concurrent assessments or reassessments.
When you file several consecutive-year returns at the same time, we do a concurrent assessment. For example, you file your 2011, 2012, and 2013 returns together to claim some credits that you didn’t know about before.
When you send us new information that changes your returns for several consecutive years, we do a concurrent reassessment. We reassess all your affected returns at the same time. The result appears in the account summary on the last notice of the series.
Tax assessment summary
The tax assessment summary on your notice lists the main lines on your assessed or reassessed tax return. Beside each line, you can see the amounts CRA used to calculate your balance on this return. You can compare these amounts to the ones on your return to see where CRA made changes, if any.
The summary also shows any penalty and interest we calculated on your refund or amount owing. If you have a balance owing from a previous assessment or reassessment, it will also appear here. If the amounts on any of the main lines differ from yours, see the Explanation of changes and important information section for more details about our changes.
Explanation of changes and other important information
The explanation of changes section on your notice explains in detail the changes or corrections made to your tax return. These changes are based on the information sent with your return and the information CRA has on file.
If, after reviewing your notice, you realize you have new or additional information you want to send in to change your return, see How to change your return.
If you disagree with your assessment or reassessment and want to register a formal dispute, see Complaints and disputes; you have 90 days from the date of the notice to register your dispute.
RRSP/PRPP deduction limit statement
This statement shows your deduction limit for your registered retirement savings plan (RRSP) and your pooled retirement pension plan (PRPP).
Deduction limit
Your deduction limit is the amount of RRSP/PRPP contributions you can deduct for the next year. Your deduction limit will appear on line (A) of your statement. Your statement also shows how CRA calculated your deduction limit. The calculation is based on your:
- earned income in the previous year;
- pension adjustments (PAs);
- past service pension adjustments (PSPAs);
- pension adjustment reversals (PARs); and
- unused RRSP deduction room at the end of the previous year
When calculating your deduction limit, CRA takes into account the information you sent with your previous tax returns and the information they have on file.
Available Contribution Room
The last line of the statement gives you your available contribution room for the next year. Your available contribution room is your deduction limit minus any unused RRSP/PRPP contributions you reported in past years that you can deduct for next year. Your unused contributions appear on line (B) of your statement.
If the total RRSP/PRPP contributions, including your current and unused contributions, you claim on your return are less than your deduction limit, you have available contribution room to carry forward to the next year.
Excess Contribution
If your RRSP/PRPP contributions are more than your deduction limit, you have an excess of contributions. You may have to pay tax on this excess amount. For more information on RRSP/PRPP contribution and deduction rules, see How much can I contribute and deduct?
Other Sections You May Find on Your Notice
Home Buyers’ Plan (HBP) statement
If you participate in the Home Buyers’ Plan (HBP), you will see your HBP statement on your notice of assessment or notice of reassessment. The HBP lets you withdraw up to $25,000 in a calendar year from your RRSPs to buy or build a qualifying home for yourself or for a related person with a disability. Your statement shows your remaining balance to repay, and your minimum required repayment for the next year.
CRA calculates your balance by subtracting the following amounts from the total you withdrew from your RRSP: total repayments, cancellations, differences included in income
Your minimum required repayment is a portion of the balance you have left to repay. If you pay less than the minimum amount, you will have to include the difference as RRSP income on your return.
Lifelong Learning Plan (LLP) Statement
If you participated in the Lifelong Learning Plan (LLP), you will see a Lifelong Learning Plan Statement on your notice of assessment or notice of reassessment. The LLP lets you withdraw amounts from your RRSPs to pay for full-time training or education for you or your spouse or common-law partner. This statement shows the balance left to repay, and the minimum required repayment for the next year.
CRA calculates your balance by subtracting the following amounts from the total you withdrew from your RRSP: total repayments, cancellations, differences included in income
Your minimum required repayment is a portion of the balance you have left to repay. If you pay less than the minimum amount, you will have to include the difference as RRSP income on your return.
If your notice included a cheque
If you think the amount is correct, you can cash your cheque at any time. If you believe that the amount of your cheque is incorrect, review the information on your notice to see if there are any changes or errors. If you find a mistake in the calculation of your refund or benefits, go to How to change your return to find out how to ask for an adjustment.
The Government of Canada is switching to direct deposit. For information about direct deposit and how to sign up, see Direct deposit.
If your notice indicates you need to make a payment, you can pay via your online banking using Pay Bills; send a cheque along with the remittance portion to CRA, you may be able to make a payment at your local branch; however, many banks are no longer taking government payments.
Your notice did not include a cheque or a remittance voucher
If you received a notice with no cheque or remittance voucher, it could be because:
- CRA calculated a zero balance on your return, so you don’t have a refund and you don’t owe any money on this return. CRA sent you the notice for your information only. Keep it for your records; or
- you paid the amount owing at the time you filed your return, so your return should show the amount due and the amount already paid. CRA sent you the notice for your information only. Keep it for your records; or
- CRA deposited your refund directly into your bank account. Your notice should show the amount that was deposited. Keep your notice or statement for your records
Your notice of assessment can come in pretty handy, and gives you information on your tax filing. If you are using a tax preparer, it is important to ensure they get a copy of this notice, especially if the assessment is different than what was filed. Today, CRA has instituted a way for preparers to get copies of NOAs without you having to directly give consent, but by ticking a box on the T183 Electronic Filer form.
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