Receiving a Notice of Reassessment from the Canada Revenue Agency can stop you in your tracks. The envelope looks official, the language is dense, and the numbers can be confusing — especially if you weren't expecting it. But a Notice of Reassessment is actually one of the more common letters the CRA sends, and once you understand what it means and what to do, you can respond with confidence.
What Is a Notice of Reassessment?
A Notice of Reassessment (sometimes abbreviated NOA or identified by form code T7WC) is a letter the CRA sends after it has reviewed your original tax return and made one or more changes to it. Think of it as the CRA revising their initial assessment of your taxes.
The outcome of that revision falls into one of three categories:
- You owe more tax — The CRA found income you didn't report, disallowed a deduction or credit you claimed, or corrected a calculation error in their favour.
- You're owed a larger refund — The CRA found an error in your favour, such as a credit that was miscalculated.
- No change to your balance — An administrative adjustment was made to your file, but your refund or balance owing didn't change.
The notice will always show your revised tax balance, a breakdown of what changed, and the reason codes explaining why the change was made. It will also display any new amount owing or refund, along with the deadline by which you need to act.
Why Would CRA Send You One?
Many Canadians assume that a reassessment means they did something wrong. That's not always the case. There are several routine reasons the CRA reassesses a return:
1. The matching program CRA's automated systems compare your filed return against all the information slips submitted by third parties — your employer's T4, your bank's T5, your investment platform's T3, and so on. If anything doesn't match, the system flags it for review. This is the single most common trigger for a reassessment. The matching program runs continuously throughout the year, so a reassessment can arrive months after you received your original Notice of Assessment.
2. A random review Every year, CRA selects a percentage of returns for random manual review — even if everything looks correct. If you're selected, a reassessment may follow as a result of that review. Being selected does not mean CRA suspects wrongdoing.
3. A request you submitted If you filed a T1 Adjustment Request (T1-ADJ) to correct your own return, the Notice of Reassessment is CRA's formal confirmation of that change. In this case, it's expected and usually positive.
4. A third-party tip In some cases, CRA receives information from a third party about an individual's tax affairs. They are required to investigate and, if warranted, will reassess accordingly.
5. An audit outcome If you were subject to a CRA audit, the Notice of Reassessment is the formal result of that audit. It will reflect all changes made as a result of the audit findings and may include penalties in addition to the tax adjustment.
6. A benefit review Reassessments can also follow reviews of specific benefits — like the Canada Child Benefit or the GST/HST Credit — where CRA determines that the amount you received was incorrect and must be repaid through your tax account.
How to Read the Notice
The notice is divided into several sections. The most important are:
- Summary of changes — Lists each line number on your return that was modified and the old versus new value
- Reason codes — A short code (e.g., "A12" or "B7") that identifies the legal basis for the change; these can be looked up in CRA's Explanation of Changes and Notices guide
- Balance due or refund — Your new financial position after the change
- Interest charges — If you owe more, CRA will have already started calculating daily compound interest from the original payment due date, not from when you received the reassessment
- Objection deadline — The date by which you must file a formal objection if you disagree — typically 90 days from the date printed on the notice
Read every section carefully before you do anything else. The date on the letter — not the date you received it — is what determines your deadline.
Understanding CRA Interest Charges
One aspect of reassessments that catches many Canadians off guard is the interest calculation. CRA does not charge interest from the date of the reassessment letter. Instead, interest on any additional tax owing is calculated from the original tax payment deadline for that tax year — typically April 30 of the following year.
This means that if you receive a reassessment in October for your 2022 taxes (originally due April 30, 2023), CRA will have already calculated approximately 18 months of compound daily interest on the outstanding balance.
The CRA prescribed interest rate is adjusted quarterly and is published on the CRA website. As of recent quarters, this rate has been between 9% and 10% for overdue taxes — significantly higher than most savings accounts or GICs. This makes prompt payment an important financial consideration even if you plan to object.
Real-world example: David, a software consultant in Calgary, received a Notice of Reassessment 14 months after filing his 2022 return. CRA's automated system had matched his T4A from a client against his filed return and found $8,500 in unreported consulting income. The reassessment showed $2,380 in additional tax owing — plus $290 in compound interest that had been accumulating since April 30, 2023. David agreed with the reassessment and paid promptly to stop further interest from accruing.
What to Do When You Receive One
Step 1: Don't ignore it
A Notice of Reassessment is a legally significant document. Ignoring it doesn't make it go away — it simply removes your ability to challenge it and allows interest to compound further. Put it somewhere safe and address it within a few days of receiving it.
Step 2: Verify the change against your own records
Pull out your original tax return and all supporting documents. Check whether the change CRA made is actually correct. Common errors you may find:
- An income slip you genuinely forgot to include (check your CRA My Account — all slips filed by third parties are visible there)
- A deduction CRA disallowed that you believe you're entitled to, and for which you have supporting receipts
- A calculation CRA made that doesn't match the rules as you understand them
- A slip that was misallocated to the wrong taxpayer (this happens in families with similar names or SINs that share a digit)
Step 3: Determine whether you agree or disagree
If CRA is right, your path is simple: pay any balance owing promptly to stop interest from accumulating further. You can pay through your bank's online bill payment (search "CRA" or "Canada Revenue Agency" as the payee), through CRA My Account, or by mailing a cheque.
If you disagree with the reassessment, you have the right to object formally — but you must act within the deadline printed on the notice.
Step 4: File a Notice of Objection if you disagree
You have 90 days from the date on the reassessment to file a Notice of Objection. This is done through:
- CRA My Account — Under "Register my formal dispute" — this is the fastest method and creates a timestamped record
- Form T400A — Filed by mail to your tax services office (allow 10–14 business days for delivery)
In your objection, you need to state clearly which part of the reassessment you're disputing, the facts supporting your position, and the reasoning for why you believe the CRA's change is incorrect. Include copies (not originals) of any supporting documents.
Once an objection is filed, the CRA is required to hold collection action on the disputed amount — meaning they cannot garnish wages or freeze accounts for the amount under dispute while your objection is being reviewed. CRA's stated service standard for most objections is 365 days, though complex cases may take longer.
Step 5: If you need more time to pay
If you agree with the reassessment but can't pay the full balance immediately, contact CRA's payment arrangements line at 1-888-863-8657 before the due date. CRA can set up a payment plan tailored to your situation. This doesn't eliminate the interest that continues to accrue, but it does prevent the account from being referred to collections prematurely.
What Happens If You Don't Respond?
Missing the 90-day objection deadline without applying for an extension will forfeit your right to dispute the reassessment through the standard objection process. At that point, your only avenue is to apply to the Tax Court of Canada — a significantly more complex and costly process that typically requires legal representation.
On the financial side, any unpaid balance will:
- Continue accumulating compound daily interest at the CRA prescribed rate
- Be referred to CRA's collections division after a period of non-payment
- Potentially result in a wage garnishment (CRA can contact your employer directly), a bank account hold, or a lien registered against real property
None of these outcomes are inevitable if you act promptly. The CRA generally prefers to resolve balances through payment or objection rather than through enforcement action — but they will escalate if ignored.
How Long Does CRA Have to Reassess?
Generally, CRA has three years from the date of the original Notice of Assessment to reassess your return — this is called the normal reassessment period. After that, your return is typically considered closed.
However, there are important exceptions. CRA can reassess beyond the normal period if:
- There was misrepresentation attributable to neglect, carelessness, or wilful default — this covers situations where a taxpayer should have known their return was incorrect
- There was fraud — there is no time limit on reassessment in fraud cases
- You waived the limitation period (for example, if you asked CRA to hold off while you gathered documents)
- The return involves foreign income — CRA generally has a six-year reassessment period for returns where foreign assets or income were not fully disclosed
In cases involving complex transactions or foreign property, extended reassessment periods may also apply under specific provisions of the Income Tax Act.
Common Mistakes Canadians Make With Reassessments
1. Missing the 90-day objection deadline. This is the single most costly mistake. Once the window closes, your options are extremely limited. Mark the deadline in your calendar the day the letter arrives.
2. Paying a reassessment they could have successfully disputed. Some Canadians simply pay to make the stress go away — even when CRA made an error. If CRA disallowed a legitimate deduction you can document, an objection is worth filing. If successful, CRA must refund the overpayment plus interest.
3. Not checking CRA My Account first. Before calling CRA or engaging a professional, log into CRA My Account. Your reassessment details, reason codes, and all slips on file are available there. This often answers the question "why did CRA change this?" in minutes.
4. Filing an objection without supporting documents. An objection without evidence rarely succeeds. Before filing, gather every document that supports your position and attach copies when you submit.
5. Confusing the reassessment date with the receipt date. The 90-day clock starts from the date printed on the notice — not the date the envelope arrived. A letter dated October 1 that arrived October 10 still has an October 1 start date for your deadline.
When to Hire a Tax Professional
Many reassessments — especially those resulting from a missed income slip or a mismatched RRSP contribution — can be resolved independently. However, you should strongly consider engaging a CPA or tax lawyer if:
- The amount in dispute is more than $5,000
- CRA is questioning business income, rental income, or foreign assets
- The reassessment relates to an audit
- You've received multiple reassessments for the same or related issues
- You've missed the objection deadline and need to explore Tax Court options
- The notice references penalties in addition to the tax adjustment (this suggests CRA believes the error was not innocent)
The CRA's Objections and Appeals page provides official guidance on the full objection and appeal process.
Need Help Decoding Your Specific Letter?
Every Notice of Reassessment is different. The reason codes, the amounts, the credits at issue, and the deadlines all vary from case to case. CRA Navigator analyses your specific letter and gives you a personalised plain-English explanation of exactly what CRA changed, why, what you owe or are owed, and a step-by-step action plan for your situation.