Every year, Canadian businesses are faced with receiving federal and provincial assessment notices, documents that are critical to the financial health of the business. These notices, issued by the Canada Revenue Agency (CRA) and provincial agencies such as Revenu Québec, confirm the details of your tax return and indicate the amount of tax owed, payments made, and refunds or balances remaining.
In this comprehensive guide, our corporate tax accountants explain how to navigate this process efficiently.
Definition of Notice of Assessment
A Notice of Assessment is an official document issued by the federal or provincial tax authorities after reviewing a tax return filed by a taxpayer, whether an individual or a business.
The Notice of Assessment serves as an official summary of your tax situation, including income taxes, tax credits, and contributions to government programs.
Federal Notice of Assessment
The Federal Notice of Assessment, issued by the Canada Revenue Agency (CRA), provides a detailed summary of the tax calculations based on the tax return. It covers important issues such as income taxes owed, tax credits to which the taxpayer is entitled, and contributions to important government programs, including the Canada Pension Plan (CPP) and Employment Insurance (EI).
The notice indicates whether the taxpayer owes money to the CRA or is entitled to a refund, which is important information for financial management and tax planning.
Quebec Provincial Notice of Assessment
The provincial notice of assessment is just as important as its federal counterpart. It is issued by provincial tax authorities, such as Revenu Québec. It is tailored to each jurisdiction's tax specifics, including tax rates, tax credits and benefit programs, ensuring fair tax assessment according to local standards.
This customization accurately reflects the different tax rates, tax credits, and benefit programs that characterize each jurisdiction's tax system.
How to get your notice of assessment for corporations in Quebec
For corporations in Quebec, access to the notice of assessment can be easily obtained online through the CRA and Revenu Québec portals, or by more traditional means such as mail or telephone. Issuance times vary, but are generally fast, allowing for reactive tax management.
When you choose the t2inc.ca online solution for your corporate taxes, you're assured of a complete service. From filing to mailing your corporate tax return, we take care of it all.
Federal and Provincial Timelines
In general, the CRA aims to issue notices of assessment within two weeks for electronic returns and up to eight weeks for paper returns. These times may vary depending on the volume of returns received and the review process.
For provincial assessment notices, the timelines may vary slightly depending on the province or territory of residence. In Quebec, Revenu Québec aims to issue notices of assessment within 14 business days for returns filed electronically. For returns mailed or filed on paper, the turnaround time can be as long as 4 to 6 weeks. As with federal returns, these times are approximate and may vary.
Notice of Assessment Number
Each Notice of Assessment issued by the CRA has a unique number that uniquely identifies your company's return for that tax year. This number is essential for all future correspondence with the CRA regarding the notice of assessment.
Similarly, Revenu Québec assigns a unique number to each provincial notice of assessment. This number is essential for accessing your tax information online, for any dispute or request for review of the notice, and for facilitating communication with Revenue Québec.
Where can I find my Revenue Québec assessment number?
To find your notice of assessment number, take the notice of assessment itself and look for a combination of 11 characters (numbers and letters) in the upper right-hand corner.
Your assessment number will always begin with an "M" or a "Q".
What do you do if you receive a notice of assessment?
Receiving a notice of assessment, whether from the Canada Revenue Agency (CRA) for a federal return or from Revenu Québec for a provincial return, is a normal step in the income tax filing process. By following these steps, you can ensure that you respond appropriately and keep your tax affairs in order.
1. Review the information
Carefully review the notice of assessment to make sure all the information is correct, and compare the amounts shown to your tax return and calculations. Look for discrepancies in reported income, deductions, and tax credits. Make sure all contributions and tax payments have been properly recorded.
2. Understand your notice
Determine whether the notice indicates an amount due, a refund, or whether your return has been accepted as is with no changes. Note important dates, such as the deadline for paying any balance due without incurring interest or penalties.
3. Act accordingly
Pay any amount due before the due date to avoid additional charges.
File an appeal or request for review if you believe there is an error in the notice of assessment. You generally have 90 days from the date of the notice to dispute the results with the CRA or Revenue Québec.
4. Keep your documents
Keep a copy of the notice of assessment with your tax documents. It may be useful for future reference, including loan applications, or to clarify your tax situation when preparing future tax returns.
5. Seek professional help if needed
Seek the help of an accountant or tax professional if you have questions or need help understanding your notice of assessment or preparing an appeal. A professional can provide valuable advice and help you navigate the process.
If you have filed your T2 and/or CO-17 returns with T2inc.ca, we can answer your questions directly. All preliminary reviews will be done before your documents are mailed and answers will be provided upon receipt of the notice of assessment.
6. Plan for the future
Use the Notice of Assessment to plan for your future tax obligations. If you receive a refund, consider how you can use the money, such as reinvesting it in your business or using it to pay off debt.
Should I keep my tax notices?
It is generally recommended that you keep your notices of assessment and related tax documents for at least six years after the end of the tax year to which they relate. This period corresponds to the statute of limitations during which the CRA or Revenu Québec may ask to review your tax situation.
These documents serve as official proof of your tax situation for a given tax year and may be required in a number of situations.
Audit and dispute: If you need to dispute your notice of assessment, or if you are being audited by the Canada Revenue Agency (CRA) or Revenu Québec, your notices of assessment are important documents to support your case.
Loan or credit applications: Financial institutions may ask to see your Notices of Assessment from previous years as proof of income when you apply for a loan, mortgage or other form of credit.
Government Programs: Some government programs, such as those related to housing assistance or employment insurance, may require your tax transcripts to determine your eligibility.
Tax and financial planning: Notices of Assessment provide important information for your future tax planning, helping you understand your tax situation and plan accordingly.
Estate administration: As part of estate administration, a decedent's tax return is required to ensure that all tax obligations have been met before assets are distributed.
What should you do if you've lost your notice of assessment?
If you find yourself in a situation where you have lost your Notice of Assessment, don't worry, as there are several ways to retrieve these documents.
The most direct way is to use the online services of the Canada Revenue Agency (CRA) via "My business Account" or Revenu Québec via "My Account for business", where you can view and download your notices for the required years. For even easier access, the "MonARC" application allows you to view your notices directly on your mobile phone.
If you don't have Internet access or prefer a more traditional method, a simple phone call to the CRA's Tax Information Service or Revenu Québec's Customer Service Department is all it takes to receive a copy by mail, once your identity has been verified. In certain situations, it is also possible to visit a CRA or Revenu Québec office in person, although this option depends on your location and existing restrictions.
To avoid future inconveniences, remember to save a digital copy of your notice and keep a paper copy for your tax records.
What happens if I'm late with my taxes?
Late filing may result in additional charges in the form of interest and penalties, which are detailed in the Notice of Assessment received after a late filing.
If you fail to respond to this notice or more than one, you risk receiving a Notice of Arbitrary Assessment, which is the IRS's estimate of your tax liability based on available information, including higher charges. Ignoring this notice can seriously worsen your situation and lead to severe collection action.
If you're late, it's important to act quickly by contacting the IRS to explore solutions such as payment arrangements or amending your tax return to reduce penalties and avoid further problems.
Questions about your Quebec Notice of Assessment?
The Notice of Assessment is the final step in your annual tax process. Whether you need help understanding your federal Notice of Assessment, your Quebec Notice of Assessment, or dealing with a tax delay, T2inc.ca is here to turn your tax challenges into successes.
Contact us to make your tax worries a thing of the past!
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
