Introduction

Every corporate T2 return filed with the CRA generates a Notice of Assessment — a document that confirms the CRA's processing of the return and states the amount of tax owing, refunded, or deferred. Most business owners glance at the balance due or refund amount and file the document away. The Notice of Assessment contains significantly more information than that — and knowing how to read it can flag issues that warrant follow-up.

What the Notice of Assessment Contains

Tax assessed: The total tax owing as calculated by the CRA. This should match the T2 as filed unless the CRA has made adjustments during processing.

Instalments credited: The instalments paid during the year, as recorded by the CRA. This figure should match the corporation's records of payments made. Discrepancies here are not uncommon — a payment attributed to the wrong account or period can result in the CRA showing a balance owing when the corporation believes it is current.

Balance payable or refundable: The net of tax assessed minus instalments credited. A balance payable means additional tax is due; a refund means overpayment.

Unused losses: The NOA will show the corporation's available loss carryforward balance — the accumulated non-capital losses from prior years available to offset future income. This figure should be reviewed annually to confirm it reflects the losses filed.

RRSP room (on the personal T1 NOA): For the shareholder's personal T1 NOA — not the corporate NOA — the RRSP deduction limit for the following year is a critical figure. Confirm this matches the expected room based on the year's salary income.

Warning Signs on the Corporate NOA

Tax assessed differs from T2 filed: If the CRA has processed the return with adjustments — disallowing a deduction, adding income — the assessed tax will differ from the amount calculated on the T2. The NOA will note any changes in a "Changes to Your Return" section. These should be reviewed with the CPA immediately — they may represent a CRA error, or they may reveal a genuine issue.

Instalments not credited as expected: If the corporation paid instalments and the NOA does not reflect them, there may be an account allocation error. The CRA may have applied a payment to a prior-year balance or to a different tax account. Contact the CRA with the payment confirmation to correct the allocation.

Refund not received: If the NOA shows a refund but the funds have not arrived after 30 days, contact the CRA. Refunds can be intercepted by the CRA to offset other balances owing across the corporation's accounts — including payroll remittances or HST balances on other accounts.

Loss balance not matching records: If the corporation's CPA has tracked a non-capital loss of $180,000 but the NOA shows $0 or a different amount, the loss may not have been properly claimed on the T2 or recognised by the CRA. This requires immediate follow-up — a loss balance that is not on record with the CRA cannot be applied against future income.

The 90-Day Window

As discussed in Article 120, the taxpayer has 90 days from the date of the NOA to file a Notice of Objection if the assessment is incorrect. This window begins from the date on the NOA — not the date it is received. Reviewing the NOA promptly and sending it to the CPA immediately upon receipt preserves the full 90-day objection window.

Filing the NOA

The NOA should be kept permanently. It is the CRA's official record of the corporation's tax position for that year — relevant for future audits, loss applications, and financing requests that ask for tax clearance or prior-year assessments.

When to Speak With a CPA

The NOA should be reviewed with the CPA as soon as it is received — not filed away unopened. The 90-day objection window is non-negotiable, and the NOA may contain information that requires action within that window.

Rotaru CPA reviews Notices of Assessment for all corporate clients upon receipt and advises on any discrepancies. Book a consultation to discuss a corporate assessment.