The Canada Revenue Agency (CRA) will only accept one return per tax year. Once you have filed your T1 return, you can’t file a new one. But you can correct the original by way of an adjustment.
To request a T1 adjustment a taxpayer must file form T1-ADJ, T1 Adjustment Request, with CRA. Timing of such filing is very important as depending on when taxpayer files the CRA may treat requests as adjustment or an application for taxpayer relief.
The timeline is determined by the date on which the taxpayer receives a notice of assessment (NOA) in respect of a tax return:
- An objection can be filed 90 days from the date of the NOA. An extension of time to object may be made within one year after the expiration of the 90-day time limit for serving a notice of objection;
- The normal reassessment period is three years from the date of the NOA.
On or before the last day for filing a notice of objection (including extension)
Taxpayers who want to make an adjustment to their return have a choice between filing form T1-ADJ and filing a notice of objection. During this period, most adjustment requests are not subject to CRA discretion.
Filing form T1-ADJ is a good choice for a straightforward adjustment that the CRA is certain to accept (for example, claiming an additional T4 or T5 or missed expense).
According to the CRA: “Taxpayers can make a request if they were not aware of, or missed, claiming a deduction or a non-refundable tax credit that was available for the year, such as childcare expenses or the amount for an eligible dependant. Individuals can also ask for refunds or reductions of amounts owing for refundable tax credits such as provincial tax credits that have not been claimed. Also, payroll deductions may have resulted in an overpayment of taxes for which a refund can be requested. The purpose of asking for an adjustment under subsection 152(4.2) is not to dispute or disagree on the correctness or validity of a previous assessment. Taxpayers should not use the minister of national revenue’s authority to allow an adjustment to amounts for a statute-barred tax year as a way to have technical matters reconsidered.”
That said, not all refund or adjustment requests will be allowed. Two common examples where the request may be denied are adjustments for permissive amounts and provincial credits that are subject to other specific deadlines. A permissive deduction or credit is one where taxpayer didn’t claim an amount on purpose so that the unclaimed amount can be carried forward and used in a subsequent year (an RRSP contribution is a common example).
If the matter is open for argument and may be disputed by the CRA, filing an objection will better preserve appeal rights.
After the last day for filing a notice of objection (including extension)
After last day for filing a notice of objection, form T1-ADJ is the only choice. In the case of adjustments that reduce tax or increase refunds, taxpayer’s entitlement to the adjustment must be clear as opposed to an amount that can be disputed by the CRA as other deadlines apply for tax disputes. During this period, most adjustment requests are not subject to CRA discretion.
After the last day of the normal reassessment period
The CRA considers adjustment requests filed after the last day of the normal reassessment period to be requests for taxpayer relief. Thus, the adjustment request should include any factors that would generally be used to support a taxpayer relief request, such as extraordinary circumstances, actions of the CRA, or financial hardship.
If a request for an adjustment is made beyond the limitation period and if the adjustment reduces tax or increases a refund, the adjustment maybe allowed at the discretion of the CRA. This request must be made within 10 years. For example, a request made in 2020 must relate to the 2010 tax year or a later one to be considered. Typically, a tax reduction or increased refund will be allowed if the CRA is satisfied that it would have been allowed on the original return and the adjustment you are requesting is correct in law.
Taxpayers must wait for the NOA before submitting any adjustment requests. Because an early adjustment request may lead to unnecessary delays in processing time for both the original return and the adjustment. Also, CRA may adjust the original return on its own. For example, if taxpayer has forgotten to include unused tuition, CRA has those figures and may add the amounts to the return directly.
There are two ways to file an adjustment request – online via the My Account portal or by mailing filled out Form T1-ADJ together with supporting documents to the CRA.
Online submissions are usually much quicker. The average processing time for CRA My Account adjustments is about two weeks. Adjustments filed by mail can take up to ten weeks to process. However, there are some changes that can only be done by mail.