When you make a mistake on your tax return

For the majority of Canadians, the due date for filing of an individual tax return for the 2023 tax year was Tuesday April 30, 2024. (Self-employed Canadians and their spouses have until Monday June 17, 2024 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency (CRA) will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and the amount of tax payable determined by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.

By April 22, 2024, almost 21 million individual income tax returns for the 2023 tax year had been filed with the CRA. And, inevitably, some of those returns contain errors or omissions that must be corrected.

Nearly 95% of the returns which have already been filed for the 2023 tax year were filed through electronic filing methods, meaning that they were prepared using tax return preparation software. The use of such software significantly reduces the chance of making a clerical or arithmetical error, like entering an amount on the wrong line or adding a column of figures incorrectly. However, no matter how good the software, it can work only with the information that is provided to it. Sometimes taxpayers prepare and file a return, only to later receive a tax information slip that should have been included on that return (or, more frequently, locate a tax information slip that had been received but was overlooked). It’s also easy to make an inputting error when transposing figures from an information slip (a T4 from one’s employer, for instance) into the software, such that $76,326 in income becomes $73,626 or $66,326. Whatever the cause, where the figures input are incorrect or information is missing, those errors or omissions will be reflected in the final (incorrect) tax payable figure produced by the software.

When the error or omission is discovered in a return which has already been filed, the question which immediately arises is how to make things right. The first impulse of many taxpayers is to file another return, in which the complete and correct information is provided, but that’s not the right answer. There are, however, several ways in which a mistake or omission on an already filed tax return can be corrected, including online options.

For several years now, taxpayers who file their tax returns online, whether through NETFILE or EFILE, have been able to notify the CRA of an error or omission in an already-filed return electronically by using the Agency’s ReFILE service. That service, which can be found at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/refile-online-t1-adjustments-efile-service-providers.html, allows taxpayers to very easily make corrections to an already filed return online, on the CRA website. Those taxpayers who used NETFILE to file their return can file an adjustment to a return filed for any of the 2020, 2021, 2022 and 2023 tax years.

While the majority of changes which a taxpayer is likely to want to make on his or her return can be made through electronic means, there are limitations to the service. ReFILE cannot be used to make changes to personal information, like the taxpayer’s address or direct deposit details. There are also some types of tax matters which cannot be handled through ReFILE, like applying for a disability tax credit or child and family benefits.

Taxpayers who have registered for the CRA’s “My Account” service have the option of making a change or correction to a return online through My Account, using the “Change My Return” feature. At one time, the process of becoming registered for My Account was somewhat cumbersome, as the taxpayer had to wait to receive a CRA-issued security code, which was sent by regular mail. That process has been streamlined, and registration for My Account can now be done in real time through what the CRA terms “document verification”. That document verification process requires a user to take a smartphone picture of their government-issued photo identification and of themself in order to verify identity. For purposes of this process, the only acceptable photo identification documents are a Canadian passport, Canadian drivers’ licence, or provincial/territorial photo ID card. More information on how to register for My Account using the document verification method can be found on the CRA website at My Account – What’s new – Canada.ca.

While using the CRA’s online services, whether through My Account or ReFILE, is certainly the fastest way to make a change or correction to an already-filed return, taxpayers who don’t wish to use any online method do still have a paper option. The paper form to be used is Form T1-ADJ E (23), which can be found on the CRA website at T1 Adjustment Request (canada.ca). Those who are unable to print the form off the website can order a copy to be sent to them by mail by calling the CRA’s individual income tax enquiries line at 1-800-959-8281.

Hard copy of a T1-ADJ E (23) is filed by sending the completed document to the appropriate Tax Center, meaning the one with which the tax return was originally filed. A listing of Tax Centres and their addresses can be found on the reverse of the TD-ADJ E (23) form. A taxpayer who isn’t sure any more which Tax Centre their return was filed with can go to https://www.canada.ca/en/revenue-agency/corporate/contact-information/tax-services-offices-tax-centres.html on the CRA website and select their location from the drop-down menu found there. The address for the correct Tax Centre will then be provided.

Where a taxpayer discovers an error or omission in a return already filed, the impulse is to correct that mistake as soon as possible. However, no matter which method is used to make the correction – ReFILE, My Account or the filing of a T1-ADJ (23) in hard copy – it’s necessary to wait until the Notice of Assessment for the (incorrect) return already filed is received. Corrections to a return which are submitted prior to the time that return is assessed simply can’t be processed by the Agency.

Once the Notice of Assessment is received, and an adjustment request is made, it will take at least a few weeks before the CRA responds by issuing a Notice of Reassessment based on the new information provided by the taxpayer. Not surprisingly, requests which are submitted during the CRA’s peak return processing period between March and July will likely take longer.

Sometimes the CRA will contact the taxpayer, even before a return is assessed (or reassessed), to request further information, clarification, or documentation of deductions or credits claimed (for example, receipts documenting medical expenses claimed, or child care costs). Whatever the nature of the request, the best course of action is to respond promptly, and to provide the requested documents or information. The CRA can assess only on the basis of the information with which it is provided, and it is the taxpayer’s responsibility to provide support for any deduction or credit claims made. Where a request for information or supporting documentation for a claimed deduction or credit is ignored by the taxpayer, the assessment will proceed on the basis that such support does not exist. Providing the requested information or supporting documentation can usually resolve the question to the CRA’s satisfaction, and its assessment of the taxpayer’s return can then be completed.