Have you received a reduced tax refund amount which is different to the amount you were expecting to receive? Try not to panic, there is a strong possibility that CRA have made a mistake when processing your tax return. What should you do?
Review your Notice of Assessment
When CRA process a tax return they issue a Notice of Assessment to you. This will be received either by mail or online to your online CRA account. You will receive your Notice of Assessment via mail at the same time as receiving your tax refund cheque. If you are set up with direct deposit tax refunds, there may be a delay between receiving the mailed Notice of Assessment or electronic copy. Your Notice of assessment will hold the key to understanding why your tax refund has been changed.
Tax return changes – Some common causes
We all make mistakes, including CRA. Sometimes CRA’s automated processing system will incorrectly adjust your tax return, resulting in a different tax refund amount being issued
Missing Relevant (T4) information
When you file your tax return, it is important that all relevant information (including T4 information) is included in your calculations before the tax return is submitted to CRA. Failure to include all T4 information will result in CRA making an adjustment to your tax refund amount, when they include all relevant information.
Immigrant/emigrant tax returns
If you have a date of entry (immigrant) or a date of exit (emigrant) on your tax return, it is very possible that CRA may have made an error with processing your tax return. We see more clerical errors made on average with immigrant and emigrant tax returns.
Non resident tax return
CRA will sometimes made adjustments to individuals tax residency status. Sometimes in error, CRA will change your status from tax resident to non-resident if their automated system incorrectly identifies dates of entry and exit, this usually happens when individuals do not file a tax return for the year they first arrive in Canada. Depending on your situation, CRA may be correcting your tax residency status
What should I do?
Depending on the change made to your tax return, you can either accept the changes made by CRA, or you can dispute them. There is typically an explanation portion on your Notice of Assessment giving a brief description of the changes which have been made to the original filing of your tax return. If you believe CRA have incorrectly adjusted your tax return, you will be able to dispute the changes made.
If you review your Notice of Assessment there will be a contact number that can be used to call CRA and speak with a representative. The CRA representative will be able to provide instruction on disputing the changes.
If in doubt contact your tax accountant
If you are unsure as to why CRA have made changes to your tax return, and your possibility of a successful dispute, it would be wise to contact your tax accountant (if you have one). They will be able to review your Notice of Assessment and advise the best course of action for a dispute. At jackstaxback we offer complimentary post tax filing advice to all clients, ensuring that any CRA clerical errors resulting in a reduced tax refund are reversed, and the correct refund amount being issued.