Notice of Assessment: An Overview

KEY TAKEAWAYS

• The Canada Revenue Service (CRA) sends out a notice of tax assessment to all taxpayers annually.
• A notice of assessment can sometimes also indicate that an individual or business has been selected for a tax audit.
• Some details in notices of assessment can include your income tax assessment, total tax refund amount, tax credit details, and nonrefundable federal tax credits, among others.

What Is a Notice of Assessment? 

A notice of assessment (NOA) gets sent by the Canada Revenue Agency (CRA) on an annual basis to taxpayers after the tax return has been filed. The assessment details the tax payers’ tax deductions and credits, any income tax deducted from paychecks, and the final amount of their tax owed or tax refund. 

When you receive an assessment notice, it will also include a handful of other deductions and figures depending on where you’re located. For example, eligible exemptions could include total nonrefundable federal tax credits, deductions from total income, or the British Columbia non refundable provincial individual tax credit.

How to a Obtain Notice of Assessment

One of the great things about a notice of assessment is that CRA automatically sends it out each year when they receive your tax return. You can either get it by mail or you can access it online through the CRA portal using your login information.

What Are the Essentials of a Notice of Assessment? 

Typically, a notice of assessment will include four primary components. Below you will find a breakdown of each and other important information to know. 

• Account Summary: At the top of each notice of assessment there will be a summary box. This box will indicate one of three specific things: the total amount you owe; if you have a zero balance; or the amount of tax refund you’ll get.
• Tax Assessment Summary: This component includes some important data from sections of your income tax return. This can include credits, deductions, and your income. As well, it will include any interest or penalties that get added to your refund. Any balances from previous years will also get listed in this section.
• Explanation of Changes: There can be times when the CRA needs to make corrections or changes to your tax return. This section will include those details and can also indicate when you will receive the Canada Child Benefit or the GST/HST credit. 
• Additional Information — This section will include any additional information that’s worth keeping a record of, such as if you took advantage of a previous plan such as the Lifelong Learning Plan. It could also include your remaining balance and the repayment amount for the next year.

How Long to Maintain a Notice of Assessment

According to the CRA, Canadians are advised to keep any and all tax information on file for a minimum of six years, including any relevant supporting documentation. This is because the CRA can take up to six years to review the tax return you submitted.

Summary

After you submit your tax return to the CRA, you will receive a notice of assessment in return. In a lot of ways, it acts as a receipt that you have submitted your tax return and it has been received. Your notice of assessment is going to include important and relevant tax information. 

It’s usually made up of four primary areas, which are the account summary, tax assessment summary, explanation of changes, and any additional information. A notice of assessment is an important document to have. It can indicate the status of your tax return and it can highlight possible issues.

Written by Jami Gong, MPAcc, CPA

Jami Gong is a Chartered Professional Account and Financial System Consultant. She holds a Masters Degree in Professional Accounting from the University of New South Wales. Her areas of expertise include accounting system and enterprise resource planning implementations, as well as accounting business process improvement and workflow design. Jami has collaborated with clients large and small in the technology, financial, and post-secondary fields.

Written by Jami Gong, MPAcc, CPA

Jami Gong is a Chartered Professional Account and Financial System Consultant. She holds a Masters Degree in Professional Accounting from the University of New South Wales. Her areas of expertise include accounting system and enterprise resource planning implementations, as well as accounting business process improvement and workflow design. Jami has collaborated with clients large and small in the technology, financial, and post-secondary fields.