How to Find and Make Sense Of Your CRA Notice of Assessment (NOA)

Hello everyone. Today I am going to show you how to.

Access retrieve your notice of assessment from Revenue Canada and how to read it. So the first step is essentially to log in to my account with cra. If you are not registered, I encourage you, I strongly encourage you to register as soon as possible because this gives you access to all of your information online in an easy to access manner. And some of this information is very important. Okay, so this is your homepage once you register and you log in. And the homepage gives you a summary of basically your status so you can see your tax returns. So there are the accounts and payments section which are amounts that you have paid. And this income tax balance is what is in your account at this time. So if this said debit you would owe money to cra. In this case it's a credit. So they actually owe $6.18 to this person.

You can access your statement of account and see all of your payments and amounts due benefits and credits. So if you had applied for example the child care credit, this would appear here. You can also apply for child benefits directly through this portal. And then here it gives you a sense of your contribution room and your RRSP deduction loans. And on the right hand side you have your.

The progress tracker of tax returns that you have filed recently.

It has the tax information slips and this is really interesting. This is where you can find the tax slips that have been submitted by your employers, by investors and anything else that is submitted electronically. And if you go here, say you've lost a tax slip or you want to see what actually has been submitted. You can go here and see that by year you have uncashed checks. And this is always interesting to see perhaps if you have received some money relating to previous years and that perhaps you never received it or cashed it. And then tax schemes, beware of tax schemes. So this gives you some information on that. Today we are just going to look at the notice of assessment and to get to the notice of assessment you would click on tax returns. First of all you'll notice here that the tax return was recently filed. You can actually recover the express Notice of assessment or you can wait for the proper notice of assessment which will be available on May 9. But in my case I actually want to retrieve a notice of assessment from previous year and, and we will take a look at that and what it means. So let's click on tax returns. So here you can see the notice of assessments for the past few years. If I click on this there are 13 years available and A few years of assessments. So I am going to go to 2022, pull up the notice of assessment. So I will click on that and you'll notice there's also a PDF version available. So if I click on the PDF, it'll download the PDF and I can now save that in my accounting folder. And I encourage you to do that. It is always good to have a PDF on file for when you need it. And there's a variety of reasons that you might need it. So here it just gives you some the personal information.

Here is an access code. And this access code is really important if you are e filing your own return because this will be required information to e file the return. So as we go down, you can see they have assessed the 22 income tax and benefit return. They have calculated the balance. So for 2022, the amount payable is here.

And the due date, after which they start charging additional interest. And at a certain point, because this balance is fairly substantial, they will send you. They will start to send you threatening letters. And at a certain point they will just submit your.

Amount payable to collections. Or if it's really a lot, they might even have some authority to go in and take it directly from your bank account. So make sure, even if you cannot pay the amount that you call them and work out an arrangement that's really, really important. And the phone number is available by just clicking on phone number CRA to interior Internet search. Okay, so again, a little account summary. Just saying the same thing. If you have made a payment, sometimes it takes a few days for it to post. Regardless, it won't show up here because this is a static notice of assessment. Now, it tells you what it has calculated. And this is important, we may review your return later to verify income you reported or deductions or credits you claimed. So even though you received a notice of assessment, it doesn't mean you're safe. You still might actually have a request for information or an audit from cra. And this can be in a few years. So it is really important that you keep all of your documentation just in case they do and that you actually have the documentation to support your deductions and claims.

Okay, so as we scroll down, you can see in this case the total income, which is line 15,000. And it's a good idea to compare this to your tax return and to see if there are any discrepancies or differences. The line numbers give you a way to directly compare.

So then you have some deductions from total income. The most popular deduction are usually RRSPs, but there are all kinds of other deductions and you can refer to your tax return to see what they might be. Your net income $23,600 is an important line that is often asked for as information when you're signing up for for government services or perhaps even a third party like a bank might want to know that information. And then you have some further deductions from net income. And then you have your taxable income. And the taxable income is basically the amount on which the tax rate apply. So you have your total income, you have deductions which are different from tax credits. And tax credits reduce the taxes payable, whereas deductions reduce your net income and bring you back to taxable income. And so the net federal tax. So essentially you are paying $11,659 one on taxable income of 119,955. You also have some non refundable tax credits. The most significant of this often is your basic personal amount, which is about 15,000 and which every Canadian taxpayer is.

Exempt from paying taxes on $15,000 or less. So it basically translates into a tax credit. It is multiplied by 15% and it reduces your taxes. So now we have your total tax payable, which is the same as your net federal tax.

And the total income tax deducted is what has been taken off at source. So if you Simply had a T4, you, you would this amount would be very close or the same as this amount. And then there would be no real taxes payable. If you have other items and this tax return specifically might have included business income or investment income, rental income, those are items on which taxes are not payable at source, then you have a refundable Quebec abatement, which applies to anybody who resides in Quebec. And because in Quebec you have to submit a second tax return to Revenue Quebec, you get credit for some of your taxes on this side. But then a whole new tax return is, as mentioned, submitted to Revenue Quebec and you get an assessment and you have to pay taxes to both CRA and Revenue Quebec, which is very, very fun. And then you have your total credits, which is the total of the total income tax deducted plus your refundable Quebec abatement.

And your payable then is the net federal tax minus these credits, which include the income tax deducted and the Quebec payment.

Essentially you have an amount in this case of 8300 etc. Owing. Now there is some arrears interest in this case. If payment is made after May 29th. Additionally you might have interest on installing installments not paid and that is something that will be included in the arrears interest category. The balance from this assessment is essentially this plus any interest.

The previous account balance is an amount that was relating to the previous year that had not yet been paid. Often this is just a lingering interest charge.

This is your total basically.

And the amount payable. And again if you have an amount payable and if you can, you should pay it as soon as possible to avoid interest charges. And given the increase in interest rates, these are going to be significantly higher than you might be used to in previous years. So again if you have the funds it's better to pay it and use that interest that would have been charged on something more interesting and gratifying. So now in this section here they give you an explanation of changes. If some of the amounts here were incorrect, if you were missing some slips or you had reported incorrect information, it will show up here. It also tells you about making payment.

And you can also call CRA to find out your balance owing. It's an automated service and it will tell you how much you owe as long as you provide this information. Your social insurance number, your date of birth and here again the amount reported line 15,000 of your tax return. And this is line 15,000.

In this section they tell you they give you information about your unused capital losses. And a capital loss is essentially on account of assets that you may have sold at a loss, often investments, but it could be a rental property and it could be a variety of other assets that give rise to capital capital gains or losses. Capital losses can only be applied against capital gains. The Canada Training limit is $750.

This is relatively new.

And then it tells you your balance includes arrears interest.

And it's the interest from the due date of your balance to the date of this notice.

This is really important. You might. So in this case this person will have to pay installments and the installments are based on the previous year amounts and sometimes it's an average of the previous two years. CRA will let you know what those are via installation notices. So make sure you check online to see what those installments due are and make those payments by the due dates to avoid additional interest.

And then finally this is really important.

And here is where your RRSP contribution limits are included. So you'll see there's an RSV deduction. So this is the carry forward amount and this is since the beginning of time what you have earned less what you have contributed. For some people this can be in the hundreds of thousands or certainly in the tens of thousands because they have not used your full RRSP contribution room. And then it adds other items. These are employers pension contributions, especially specific type of pension plan. Then it shows you how much was deducted, how much you had contributed in 2022 and then it adds the amount for 2023 and it gives you a total. The RRSP deduction limit for 2023 is 1541 and this is your available contribution room for in this case for 2023. On the 2023 notice that you will receive or have already received, it'll show you the amount that you can contribute this year that will then be applied to next year and a couple points in this again this can be in the tens of thousands of dollars. You can deduct the full amount or less in any given year whatever this total is. Secondly, you do not want to over contribute and because there are significant penalties for over contribution and it tells you that you may have to pay 1% monthly tax on any excess contributions. So it is important to track this and make sure that you are optimizing your RRSP contributions and then it gives you a phone number to call.

Now it'll be a little less busy but it can still take time to get through to someone. But if you do have questions it is, you know, worth at least trying to figure out what they know. Sometimes if your questions are a little more complex it is worth speaking to an accountant because cra, especially the first level of CRCRA people aren't necessarily aware of more complex situations. If you change your address, this is really important. Make sure you reflect this with CRA as soon as it happens and then it gives you some information on registering disputes, if you want to Change your return, etc. Etc.

So that is an overview of how to read your assessment with Fromcraft. I hope this was helpful. If you have any questions, don't hesitate to leave a comment and please subscribe and I hope you have a wonderful day.