How long do you have to file a T1 adjustment?

If you find yourself in a situation where you have filed your personal tax return and then realize that you need to make a change, there are some steps you need to follow.

First, you need to wait until the notice of assessment on your original return is received before you file a T1 adjustment.  Do not file a second tax return for the same tax year.  This will ensure that CRA has processed the original return and can then process the adjustment without any confusion.

Do not file a second tax return for the same tax year

Once you have received your notice of assessment, file only a T1 adjustment for the changes you want to make.  Do not file a second tax return.  You are not required to submit receipts or slips if you file your T1 adjustment electronically, however, you may need to provide them if asked. If you choose to submit your T1 Adjustment by mail, you are required to send in the receipts or slips to support your adjustment.

You are able to ask for an adjustment to be made to a tax year ending in any of the 10 previous calendar years.  For example in 2016, you can adjust tax returns dating back to 2006.  Once you have sent in your T1 Adjustment, CRA has processing times up to 8 weeks before a Notice of Reassessment is issued.  The reassessment will state any changes made or why changes were not allowed.

How long do you have to file an Amended T2?

If you are a Canadian Controlled Private Company (CCPC), you can amend your corporate tax return within 3 years of the date of the original notice of assessment.  If you are not a CCPC, you can amend a tax return within 4 years of the original notice of assessment date.  An additional 3 year extension is possible for certain situations including;

• The Corporation needs to carry back a loss or credit from a later tax year;
• A reassessment of another taxpayer affects the corporation’s taxes;
• Various non-resident transactions affect the corporation’s taxes

Before filing an Amended T2, wait until the Company has received the Notice of Assessment on the original return filed.  Then, proceed with filing an Amended T2.  These can be filed electronically or by mail.  If the amendment includes a carry back for a loss or a credit to a previous tax year, additional schedules are required to be provided to CRA which include;

• Schedule 4 – Corporation Loss Continuity Application – if you are carrying back a loss
• Schedule 21 – Federal and Provincial Foreign Income Tax Credits – if you are asking to carry back foreign tax credits on business income
• Schedule 31 – Investment Tax Credit – If you are asking to carry back an investment tax credit
• Schedule 42 – Calculation of Unused Part I Tax Credit – If you are asking to carry back a Part I tax credit

Once CRA has processed the amendment, the Company will receive a Notice of Reassessment.  CRA does not provide a time frame for how long a reassessment will take.

If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to Sophie Duncan of KWB Chartered Accountants for providing this content.