Refunds and Amounts Owing
After you file, one of two things happens: the CRA owes you money, or you owe the CRA money. Either way, the Notice of Assessment is the document that settles it. This guide explains what the Notice of Assessment says, how refunds are paid, how to pay a balance owing, and what to do if you cannot pay in full. It explains the process only; it cannot tell you how much you owe.
The Notice of Assessment settles it
After you file, the CRA sends a Notice of Assessment (NOA) stating the tax assessed, any refund or balance owing, and your RRSP deduction limit for next year. A refund is paid by direct deposit or cheque. A balance owing is due 30 April, and interest compounded daily starts the next day.
What the Notice of Assessment says
The Notice of Assessment (NOA) is the CRA’s answer to your return. It states the tax the CRA assessed, any refund or balance owing, and your RRSP deduction limit for the following year. It also shows whether the CRA changed anything you reported — and if it did, it will say what it changed.
Read the NOA when it arrives, and compare it with what you filed. If the CRA changed something and you disagree, do not ignore it: the reviews and appeals guide explains how to object. If the NOA shows a balance owing you were not expecting, the rest of this guide explains your options.
How refunds are paid
If the CRA owes you money, the refund is paid by direct deposit if you have set it up in CRA My Account, or by cheque if you have not. Direct deposit is faster and safer — a cheque can be lost or delayed, and the CRA will not reissue one quickly.
You can check the status of your refund in My Account. Refunds for electronically filed returns are usually processed in about two weeks; paper returns take longer, often eight weeks or more. If your return is selected for review, the refund waits until the review is done.
If you owe money
If you owe tax, the balance is due 30 April for the tax year — even if you are self-employed and your return is not due until 15 June. Interest compounded daily starts on 1 May at the CRA’s prescribed rate, which is reset every quarter.
You can pay online through your bank, in My Account, by pre-authorized debit, or by other methods listed on canada.ca. Pay the full amount if you can: interest runs on whatever is left unpaid, and it also runs on any penalties.
If you cannot pay in full
If you cannot pay the full balance, pay what you can by the deadline and contact the CRA to discuss a payment arrangement. The CRA can agree to a schedule of payments, but interest continues to run on the unpaid balance while the arrangement is in place.
The CRA also has taxpayer relief provisions: in limited circumstances it can cancel or waive penalties and interest, for example where extraordinary circumstances prevented you from filing or paying on time. Relief is discretionary — you must apply for it and explain the circumstances — and it is not a way to avoid tax you owe.
Reassessments
The CRA can reassess your return after the Notice of Assessment if it finds an error or receives new information — for example, a late slip from a payer. For individuals the CRA generally has three years from the date of the Notice of Assessment to reassess, though there are exceptions, including where there has been misrepresentation.
A reassessment arrives as a new Notice of Assessment or Reassessment. If you disagree with it, you can object — the reviews and appeals guide explains the deadlines and the process. Keep your records for six years from the end of the tax year, so you can answer a reassessment if one comes.
Sources: Canada Revenue Agency, canada.ca; CRA, Notice of Assessment; CRA, payments; CRA, taxpayer relief.