Catch-up
CRA assessed you because you did not file. What does that assessment mean?
2026-10-29 · 6 min read · Tax Everyday, Vaughan
That notice is an arbitrary assessment, sometimes called a arbitrary or “notional” assessment. CRA built a return from the T4s and other slips it already holds. It is a legal assessment. Interest runs on it. Collections can act on it. It is also usually wrong in your favour to CRA, because the estimate often leaves out RRSP deductions, childcare, moving costs, union dues, and business expenses the slips do not show.
The remedy is the real return for that year. Once it is filed and assessed, it replaces the arbitrary figures. The replacement does not wipe out the interest that accumulated on the unpaid estimate, and it does not cancel a penalty that was properly charged. If the real return is a refund, or a much smaller balance, the difference is what you are fighting for. If you are outside the three-year refund window, a refund on that late original return is generally not paid.
Read the notice before you pay the whole figure
Paying something stops interest on the amount you pay. Paying the entire arbitrary number, when you know expenses were missed, hands CRA cash you may not owe. The smarter sequence is: get the slips CRA used, add what they did not have, file the real return, then pay the revised balance.
- Match every T-slip on the notice to a slip you have. Missing slips are why the estimate and your memory disagree.
- Self-employed income CRA saw from a T4A is often gross. The T2125 expenses are not in the estimate.
- A demand to file that you ignored is what usually comes just before this assessment.
- If the assessment is corporate, the same idea applies to a T2: file the real statements, do not just pay the estimate.
Bring the notice, not a retelling of it
Tax Everyday needs the notice itself, the year, and any slips you have. A straightforward personal year that was arbitrarily assessed is still a T1. It starts at $90 plus HST when the slips are ordinary. If we have to reconstruct a business year underneath the assessment, that year is quoted.
Drop a photo of the notice if that is all you have today. The figure on it is the number collections will use until a real return replaces it.
Short answers
Can I object instead of filing?+
An objection is the wrong tool when the return was never filed. File the return. An objection is for when you disagree with how CRA assessed a return that exists.
Will CRA refund the extra I already paid on the estimate?+
If the real return shows a lower balance, CRA applies the difference the way it applies any overpayment. If the year is outside the refund limit, ask before you count on a cheque. Bring the proof of what you paid.
Want this applied to your file?
These notes are general. A return is prepared only after we see your slips.