Have you recently filed taxes in Canada? Did you receive a notice of assessment or NOA? Are you lost when it comes to the CRA?
If you answered "yes" to any of these questions, stick around. We're going to talk about the Canada Revenue Agency (CRA) and its use of notice of assessments (NOAs).
If you've filed taxes in Canada before, you've likely gotten one in the mail. However, you might be new to getting taxed or you may still not understand what an NOA is.
Whatever situation you're in, you've come to the right place. To learn about NOAs, just keep reading.
What Is a Notice of Assessment?
When you send your income taxes in, the Canada Revenue Agency (CRA) reviews your return. Once they've gone over your return, they will send you a document that is called the 'notice of assessment.' We'll call it NOA for short.
The NOA tells you whether or not you owe money - in taxes - to the government. It will tell you that you owe a balance, owe nothing, or are to receive a refund from them.
A tax refund could mean many things. You might have paid too much in taxes, you might have a deduction, or they might have found that they owed you money from a separate transaction.
Whatever it may be, you getting a refund simply means that you should be expecting some amount of money to land in your bank account or come to your mailbox.
The NOA should match what you listed on your taxes. This includes information like your income, your expenses, your donations, and more. If the CRA believes that you listed all of this information correctly, they will list it as you did on your NOA.
If they do not agree with the information that you listed on your taxes, they may change the information. For example, you might have listed a donation on your tax return that they do not consider valid. In this case, the numbers on the NOA and your tax return may be different.
If you paid the exact amount of taxes that were due, you should have a zero balance unless the CRA found a deduction somewhere. In that case, they would owe you money.
If you paid less than the amount that was due, you may owe the CRA a certain amount. They will list this on your NOA if so.
What Do I Do If I Owe Money to the CRA?
If your NOA says that you owe money to the CRA, you have three choices.
- You can pay the balance on the NOA in full.
- You can pay the balance via a payment plan that you set up with the CRA. You must contact them and agree to a payment plan.
- You can object to the amount that you owe. You will need to submit a Notice of Objection and collect a strong defense. We recommend hiring legal help if you want to build the best case for yourself.
Note: The best way to prepare to pay taxes in full is through smart financial planning.
How Do I Understand a CRA Notice of Assessment?
Understanding an NOA can be difficult, especially if you've never seen or gotten one before. Government documents in general are hard to understand.
The NOA in particular is written in a complex language that the average Canadian won't be able to decipher easily. Regardless, the entire document is extremely important and deserves a thorough read.
A typical NOA includes the following elements:
- Your name
- Your address
- Any relevant contact information
- Your social insurance number
- The tax year that the NOA is for
- The type of return that you filed
- The date that the statement was issued
- Information regarding anything further action required from you
- A list of the changes that the CRA made, if any
- How much you've already paid in taxes for the tax year indicated
- How much you still owe in taxes, if any
- A summary of your account
- Your balance for the given tax year
- Details on how to pay, if you owe money
- Information about your RRSP (Registered Retirement Savings Plan) and TFSA (Tax-Free Savings Account), if any
What Does a Notice of Assessment Tell Me About My RRSP?
Your notice of assessment will tell you three things about your Registered Retirement Savings Plan (RRSP):
- Your deduction limit
- Your available contribution room
- Your excess contribution given
Your deduction limit tells you the number of RRSP deductions you can take in the next year. Your NOA also shows how your deduction limit was calculated using the information on your previous tax return.
Your available contribution room tells you how much you can contribute to the account during the next year, while the excess contribution room tells you how much extra you paid to the account. If you pay more than is allotted, you might have to pay tax on the extra amount.
How to Get My Notice of Assessment?
Normally, tax filers are going to receive their notice of assessment from the CRA via the method that they filed their taxes. This means that you will likely get your NOA in the mail if you sent your tax report by mail. If you sent your tax report online, you'll likely get your notice of assessment online.
You should note that sending your income tax report and receiving your notice of assessment via mail is going to be slow. In fact, it could take eight weeks to get your NOA after mailing your tax report. It might take even longer if you send your report right before the deadline.
Tax season is an extremely busy time, and it's likely that your tax documents will get mixed in with everyone else. Just be patient.
Government officials will eventually get to your report. It takes time.
How Do I Get My Notice of Assessment If I Submitted My Return Electronically?
As we discussed, you'll get your notice of assessment online if you filed online. On average, people who file their tax returns online receive their notice of assessment within two weeks. Just like those who file paper copies, it could take longer if you submitted near the deadline.
As you're submitting your tax return online, you may notice that there is an option for an Express NOA. This is a legitimate option that is run through the CRA.
By opting for this, you'll receive your NOA on your tax filing software after you officially file your documents.
You should opt for the NOA if you're interested in paying your taxes quickly, getting a return quickly, or knowing what you owe several weeks ahead of time. However, if you'd like to get an Express NOA, you need to:
- Be registered as an electronic filer;
- Be authorized for online access with the CRA;
- Be registered in Represent a Client and have a RepID, GroupID, or business number;
- Use EFILE-certified software; and
- Complete forms in full.
The one downside that comes with getting an Express NOA is that the document does not have your account balance on it. This means that you will not be able to see any payments you've made to the CRA.
In order to see these, you should look at your bank account, log into your CRA account, or call the CRA's automated account balance service. Make sure to match these payments to anything that the CRA believes that you owe them or they owe you.
How Long After a Notice of Assessment Do You Get a Refund?
If you're expecting a refund from the CRA, you might be wondering how long it will take to get that refund.
The time that you get your refund depends on how long it took you to get your NOA. The closer you file to the deadline, the longer the CRA takes to process everything.
Therefore, if your NOA took a long time to come back, your refund is likely to take a long time, too. This is just because the NOA taking a long time may signify that the CRA is currently busy with a lot of returns coming in at once.
You'll likely receive your refund between 2 and 16 weeks after you submitted your tax return. Like the NOAs, refunds coming through the mail will take longer than refunds through direct deposits.
Be mindful that the CRA doesn't start processing returns until mid-February. No matter how early you turned in your tax return, you shouldn't expect a return until March at the earliest.
If you're really worried about your refund, you can check the status of that refund on your CRA My Account page. You can also look at the MyCRA mobile app.
If you can't access either of these platforms or you'd rather speak with a person, you can call the CRA's Telefund line or the Tax Information Phone Service.
If you choose to call, you will need the following information readily available:
- Your Social Insurance Number
- Your name
- Your date of birth
- Your address
- Your NOA, in case they ask you to provide details from the document
If your information has recently changed (your name, address, email, bank account, etc), this could also slow down your return. When in doubt, check your account.
What Is a Notice of Reassessment?
As we discussed at the very beginning, a notice of assessment marks the initial review of your tax report and tax information by the CRA. However, there is an additional document referred to as the notice of reassessment.
As it sounds, the notice of reassessment marks an additional review of your tax report and tax information by the CRA. There could have been a change in your account, an error with the previous NOA, or a dispute that was settled. Whatever the cause, there was a change that caused the CRA to look over your notice of assessment again.
If another check/assessment of your tax information is done by the CRA, you'll receive your notice of reassessment via the mail or online. Again, this depends on how you filed your taxes.
The notice of reassessment will look the same as the notice of assessment.
However, the notice of reassessment will also detail where changes were made to your return. Just like your NOA, your notice of reassessment will tell you what you should do next. Then, you will behave as if this were the original NOA.
You'll fall into one of three categories:
- You'll owe the CRA money.
- The CRA will owe you money.
- Your balance will be zeroed. This means no payment and no refund.
If you end up in the first category where you owe the CRA money, you can choose to do one of three things (just like we discussed earlier):
- Pay the amount in full.
- Contact the CRA about making a payment plan.
- Dispute the charges. If you do this, we suggest hiring legal counsel to help you build a case.
If you fall into the second category where the CRA owes you money, all you have to do is wait for the refund cheque or direct deposit (depending on what you requested that the CRA do with refunds on your application). If you're not sure when your refund cheque is going to come, go back and read the section entitled, "How Long After a Notice of Assessment Do You Get a Refund?"
If you fall into the third category where your balance was zeroed, you don't have to do anything. You have successfully filed your taxes, and you don't owe anything.
Where Can I Find More Financial Information?
Understanding the CRA, financial accounts, refunds, taxes, and more is nearly impossible. Even after reading all of this information about your notice of assessment, you may still have some questions.
If so, you should head on over to our blog at Insurdinary. We share financial information and tips that will help you get through all of the financial jargon.