By OptiVal Editorial Desk
You filed your return weeks ago. Then a letter (or an email notification) arrives from the CRA, and most small business owners do the same thing: scan for the refund or balance owing, then file it away. But your CRA notice of assessment is worth a proper read. It is the CRA’s official record of what it did with your return, and it holds a handful of numbers you will need for years to come.
Here is what each section means, in plain language, and what to do if something looks off.
What the notice of assessment actually is
Every time the CRA processes a tax return, it issues a notice of assessment. It confirms what you reported, shows the CRA’s math, and states the final result: refund, balance owing, or zero. It is not a bill in itself, but it is the document any balance owing is based on.
One common mix-up: a notice of reassessment is a different document. It arrives when the CRA changes a return that was already assessed, after a review, an audit, or an adjustment you requested. Both documents carry the same legal weight, and both start the 90-day objection clock. More on that below.
How to get your copy
If you are registered for CRA online mail, your notice shows up in CRA My Account (for individuals) or My Business Account (for corporations). Otherwise it comes by paper mail. You can also authorize your accountant to receive it, which is worth doing: a second pair of eyes catches adjustments you might miss.
Keep every notice you get. The CRA’s record-keeping requirement is six years, but lenders, lawyers, and benefit programs ask for notices long after that. They are small files; keeping them forever costs nothing.
Your CRA notice of assessment, line by line
The main section, headed “Tax assessment and summary,” lists the key lines from your return. Here is what each one means:
- Line 15000, total income. Every income source added up: employment, self-employment, investments, pensions, rental income, and benefits.
- Line 23600, net income. Total income minus deductions such as RRSP contributions and business expenses. Lenders use this line to size up your income for a mortgage, which is why self-employed borrowers are usually asked for their two most recent notices.
- Line 26000, taxable income. Net income minus a few further deductions. This is the number your tax is calculated on.
- Lines 35000 and 61500, non-refundable tax credits. Federal and provincial credits (basic personal amount, medical expenses, donations, and others). They reduce tax owing but cannot create a refund.
- Lines 42000 and 42800, net federal and provincial tax. The tax calculated after your credits.
- Line 43500, total payable. All tax, plus CPP on self-employment income and EI premiums owing.
- Lines 43700 and 48200, tax deducted and total credits. What you already paid through payroll deductions, instalments, and refundable credits.
- Balance from this assessment. Total payable minus total credits. A credit balance means a refund; a debit balance means you owe. The notice also confirms your direct deposit details if you are set up for it.
Compare these lines against the return you filed. If anything differs, the CRA changed something, and the next section tells you why.
The RRSP deduction limit statement
Tucked at the end of your notice is one of the most useful numbers in Canadian tax: your RRSP deduction limit for next year. For the 2026 tax year, new room equals 18 percent of your 2025 earned income, capped at $33,810. Earned income means salary, self-employment income, and net rental income. Dividends, capital gains, and investment income do not create RRSP room, which is why incorporated owners paid mostly in dividends often find their limit smaller than expected.
Two guardrails matter here. Unused room carries forward indefinitely, and the CRA allows a $2,000 lifetime buffer before penalties begin. Contribute more than $2,000 above your limit and the excess is taxed at 1 percent per month until you withdraw it. Always check this number before contributing, because the CRA’s figure does not include contributions you have already made this year. We explain the full mechanics in our RRSP guide.
“Explanation of changes”: when the CRA changed something
This section tells you exactly what the CRA adjusted and why. Common causes: a slip the CRA has on file that you forgot to report, a credit you claimed that did not qualify, or a straightforward math correction. Read it carefully: the adjustment stands unless you act.
Your notice can also carry an instalment reminder. If your net tax owing crossed the threshold, the CRA may require quarterly instalments next year. Many owners first learn about instalments this way. Our instalment guide walks through the rules.
What to do if you disagree with the assessment
You have the right to object, but the clock starts on the date the notice was mailed, not the day you opened it. For corporations, the deadline is 90 days from the date on the notice. For individuals, it is the later of 90 days and one year after the filing due date for that year. You can file online through your CRA account or by mail using Form T400A, Notice of Objection.
Miss the deadline and you can apply for an extension, but only within one year after it expires, and extensions are not guaranteed. Once both windows close, the right to dispute through the objection process is generally gone. Interest compounds daily on any unpaid balance while an objection is under review, so pay what is clearly owed even while you dispute the rest.
One more deadline worth knowing: the CRA can normally reassess your return for up to three years from the date the original notice was mailed. If it can prove fraud or misrepresentation, there is no time limit at all.
Why the notice matters beyond tax season
Your notice is income proof. Mortgage lenders routinely ask for the two most recent notices and use line 23600, net income, for debt service ratios. Self-employed borrowers may need three years. Benefit programs, immigration paperwork, and legal disputes can all call for it, which is another reason to keep every one.
For corporations the payment dates differ: the balance is due two months after the fiscal year-end (three months for eligible small Canadian-controlled private corporations), and the T2 return itself is due six months after year-end. For individuals, any balance owing is due April 30, even if you are self-employed and your return is not due until June 15.
Read the notice, check the math, note your RRSP room, and deal with any changes right away. Ten minutes with your notice of assessment beats a surprise letter next spring.
Keep your books clean all year
Most notice-of-assessment surprises start with messy books: a missed slip, a receipt you cannot find, a deduction claimed without support. We are led by qualified professionals with more than 75 years of combined experience, and our bookkeeping service keeps your records clean month to month, from $199 per month. Catch-up or cleanup work runs $45 per hour, and consulting is $125 per hour. Book a free consultation and we will take a look at your situation.
