What is a CRA reassessment and how is it different from an assessment?
When you file a tax return, CRA reviews it and issues a Notice of Assessment — its initial calculation of the tax you owe or the refund you are owed. A reassessment is a revised calculation that CRA issues after changing one or more items on your return. It produces a new Notice of Reassessment.
Reassessments can happen for several reasons. CRA may reassess based on information it receives from third parties (such as T4s or T5s that your employer or bank filed), after an audit, in response to an adjustment request you made yourself, or automatically when CRA processes related returns. Not every reassessment increases the taxes you owe — sometimes a reassessment results in a larger refund.
If CRA reassesses and you owe more tax, interest runs from the original payment due date, not from the date of the reassessment. That means an audit completed years after the original filing can generate significant interest even if the underlying tax adjustment is modest. If you disagree with a reassessment, you have the right to file a Notice of Objection. For most individuals and graduated rate estates, the deadline is the later of one year after your return's filing-due date and 90 days after the date on the Notice of Reassessment; corporations and other taxpayers have 90 days after the Notice of Reassessment.
Key takeaways
- A Notice of Assessment is CRA's initial review; a reassessment is a subsequent revision.
- Reassessments can arise from audits, third-party information slips, or your own adjustment requests.
- Interest on additional taxes owing runs from the original due date, not the reassessment date.
- Individuals and graduated rate estates have the later of one year after the filing-due date or 90 days from the Notice of Reassessment to object; corporations have 90 days.