What Is a Notice of Assessment? CRA Explained

A tax return is not fully settled when you submit it. It is settled when the Canada Revenue Agency processes it and issues its decision. So, what is a notice of assessment? It is the CRA’s official statement of the tax return it assessed, including whether you will receive a refund, owe a balance, or need to take further action.

For individuals, self-employed professionals, and business owners, the notice is a key tax record. It confirms the CRA’s view of your filing based on the information available when it processed the return. Read it carefully, save it with your tax records, and do not assume it means every item in your return has been permanently accepted without question.

What Is a Notice of Assessment From the CRA?

A Notice of Assessment, often called an NOA, is issued after the CRA processes an income tax return. Most taxpayers receive it through CRA My Account, although it may also arrive by mail depending on account preferences.

The notice compares what you reported with what the CRA accepted or changed. If the numbers match, it confirms the outcome of your return. If they do not match, the notice identifies the adjustment and shows the revised result.

For example, you may have claimed a tuition amount, medical expense, business expense, tax credit, or RRSP deduction that the CRA could not verify from the information it had. The CRA may reduce or deny that claim and recalculate your refund or balance owing. A Notice of Assessment tells you that this happened, but it may not provide every detail needed to resolve the issue. Supporting correspondence in your CRA account may provide additional direction.

The notice is not a tax bill in every case. It may show a refund, a nil balance, or an amount owing. It is also not the same as an audit notice. However, the CRA can review or reassess a return after issuing an NOA, particularly if it later receives new information or asks for supporting documents.

What to Check on Your Notice of Assessment

Start with the taxpayer name, tax year, and date of the notice. These basic details matter when matching the assessment to your filed return, payment records, and any correspondence from the CRA.

Next, review the final result. The notice will generally show whether you have a refund, a balance owing, or no amount due. If you expected a refund and the notice instead shows a balance owing, compare the assessment with the copy of the return you filed. Common causes include a changed deduction, an omitted tax slip, installment amounts that were not credited, or a mismatch in reported income.

The calculation summary is equally important. It outlines income, deductions, non-refundable credits, tax payable, payments, and the balance after assessment. You do not need to recreate every calculation immediately, but you should identify any line that differs materially from your return.

Your NOA may also show tax information that affects future planning. Depending on your circumstances, this can include your available RRSP deduction limit, unused tuition amounts, Home Buyers’ Plan information, or installment requirements. These figures are often more useful than the refund amount because they help determine what you can claim or contribute in a later year.

For an incorporated business, the CRA issues a corporate notice of assessment after processing the T2 corporate income tax return. A corporate assessment may confirm taxes payable, interest, penalties, refundable tax balances, or amounts affected by prior losses and credits. Business owners should compare it against their corporate tax return and bookkeeping records, especially where the company has claimed investment tax credits, research credits, losses, or industry-specific deductions.

A Refund Does Not Mean You Can Ignore the Notice

A refund is welcome, but it should still be checked. It only confirms that the CRA calculated an overpayment after processing the return. It does not necessarily mean your return is free from future review.

Keep the notice, your filed return, tax slips, receipts, invoices, mileage logs, and other supporting documents for the required retention period. This is especially relevant for self-employed taxpayers, real estate investors, contractors, professionals, and corporations with more complex records. If the CRA later requests proof, an organized file can reduce delays and avoid avoidable adjustments.

If your refund is smaller than expected, do not spend time guessing. Compare the refund shown on the NOA with the refund on your filed return and review the explanation of changes. A tax preparer can determine whether the CRA adjustment is correct, whether documents should be submitted, or whether a formal challenge is appropriate.

What to Do If You Owe Money

If the notice shows a balance owing, pay attention to both the amount and the payment deadline. Interest can apply to overdue tax balances. For many individual taxpayers, the payment due date is tied to the original return payment deadline, not the day the CRA issues the Notice of Assessment. Receiving the notice later does not necessarily remove interest that has already started accruing.

If you cannot pay the full amount immediately, file the return anyway and make a payment arrangement with the CRA where appropriate. Filing late can create separate penalties, while paying what you can reduces the balance on which interest may apply. Do not ignore CRA correspondence simply because the balance is difficult to manage.

Business owners should also confirm whether the balance relates to personal income tax, corporate income tax, GST/HST, payroll remittances, or another CRA program. Each account has different filing, payment, and compliance requirements. Mixing them together can lead to bookkeeping errors and missed deadlines.

How to Respond to an Incorrect Assessment

An assessment can be wrong, but the right response depends on why it is wrong. If you missed a slip, entered an amount incorrectly, or need to add a deduction you overlooked, requesting an adjustment may be the practical route. Individuals commonly use a T1 adjustment request for personal returns, while corporations may need to file an amended T2 return or submit the appropriate supporting documentation.

If you disagree with a CRA decision after reviewing the facts and documents, you may be able to file a notice of objection. This is a formal process with deadlines. For many individual taxpayers, the objection deadline is generally 90 days from the date on the Notice of Assessment or one year from the filing deadline, whichever is later. Corporate deadlines and special situations can differ, so do not rely on general information when a significant balance, penalty, or denied claim is involved.

Before filing an objection, identify the exact line or decision you dispute, gather the documents that support your position, and calculate the correct result. An objection is stronger when it addresses the CRA’s stated reason rather than simply repeating the original claim.

Notice of Assessment vs. Notice of Reassessment

A Notice of Reassessment is issued when the CRA changes a tax return that it previously assessed. This can happen because you requested an adjustment, the CRA received new tax information, or the CRA reviewed a claim and changed it.

A reassessment can increase a refund, reduce an amount owing, or create a new balance. It may also add interest or penalties. Treat a Notice of Reassessment with the same attention as the original NOA, but compare it against both your original return and the earlier assessment. The change between those documents is usually where the issue becomes clear.

When Professional Tax Support Is Worthwhile

Straightforward assessments often require only a quick review and secure recordkeeping. Professional support becomes more valuable when the CRA has denied major expenses or credits, assessed a large balance, requested documentation, issued repeated reassessments, or raised questions about business income, rental properties, cross-border income, cryptocurrency activity, or corporate tax filings.

BOMCAS Canada assists individuals and businesses with tax return reviews, CRA correspondence, adjustments, objections, bookkeeping support, corporate tax accounting, and tax planning. The best time to seek help is before a deadline passes or interest continues to accumulate.

Your Notice of Assessment is more than a confirmation screen after filing. Give it the same attention you would give a contract or financial statement: check the numbers, preserve the records, and act quickly if the CRA’s result does not match the facts.