The CRA Notice of Assessment
The Canada Revenue Agency (CRA) issues the Notice of Assessment to every Canadian taxpayer after processing their tax returns. This form has a summary of the results and the total amount of taxes that the taxpayers need to pay or the amount that the CRA will refund to them.
The Notice of Assessment includes the amount of tax credit, tax refund, list of deductions, and the already paid income tax. Let’s discuss this tax assessment form in detail.
This section on your Notice of Assessment or NOA shows the results of assessed and reassessed tax returns. This could include a refund, balance owing, or zero balance. The owing balance amount will be inclusive of any and all amounts a taxpayer might be liable to pay from previous returns.
If you file the tax returns of a few years together, such as filing for 2018, 2019, and 2020, these are called consecutive tax returns. The CRA provides a concurrent assessment of all these years together. If a taxpayer later discovers some information that might change their tax returns, they can send this information to the CRA, and the CRA then performs a concurrent reassessment.
Tax Assessment Summary
In tax assessment section, the important lines which the CRA takes into account when assessing your tax returns are given. The amounts used to evaluate the balance are written next to each line. A taxpayer can match these amounts to payments on their return to determine if the CRA made any changes and what they were.
Moreover, a tax assessment summary will also include any penalty or interest that is applied to the refund or the owing balance amount.
Explanation of Changes
The NOA form contains an explanation of changes about the corrections and alterations the CRA made in the tax returns. This detailed information is provided to the taxpayer so they can check whether all the information is correct.
If you find any discrepancy in the report, you can register an official dispute claim within 90 days of the date when the Notice of Assessment was issued to you.
Registered Retirement Savings Plan Deduction Limit
The NOA also has a section for the deduction limit on a Registered Retirement Savings Plan or RRSP. This deduction limit refers to the number of contributions a taxpayer can subtract for the following year.
The statement includes the highest amount a taxpayer may contribute for the upcoming year. If a person’s RRSP contributions are greater than their deduction limit, they need to pay the required taxes on their excess contributions.
If you’re looking for a tax planning consultant to help you with your tax returns and your Notice of Assessment form, contact us at Faber LLP. We’re a tax consultancy firm, and we provide excellent tax advisory services in Edmonton. Contact us to find out more about our services.