What Happens if You Make a Mistake on Your Taxes in Canada?

Making a mistake on your taxes is more common than you might expect. In Canada, you can easily make a change to your tax return to correct the error, going back as far as ten years if required. After you submit your taxes to the Canada Revenue Agency (CRA), you’ll need to wait for them to send you a confirmation, called a Notice of Assessment (NOA). Once you receive your NOA, online or by mail, you can follow the steps below to change your return.

Common mistakes when filing taxes in Canada

Before we dive into the steps to change your return, it’s worth discussing some of the common mistakes people make. This way, while you’re adjusting for the error you’ve identified, you may be able to uncover other issues proactively. Common mistakes include:

1. Receiving a tax form after you’ve already filed your taxes

   • Perhaps you forgot about a savings account that had earned interest throughout the year, resulting in an unexpected T5 tax slip. Or, maybe you forgot you contributed to your Registered Retirement Savings Plan (RRSP) and later found your tax receipt in a pile of old mail.

2. Forgetting to claim a taxable benefit

   • You may have made donations throughout the year that you didn’t realize could lower the taxes you owe. Or, you might have paid tuition for a qualifying post-secondary program and forgot to claim it on your taxes. There’s a long list of ways to lower your taxes through tax rebates and deductions.

3. You claimed a benefit that you’re not eligible for

   • Perhaps you thought an expense qualified for a tax benefit, but after further research or discussions learned you weren’t eligible. Rather than wait for CRA to find the error, you can make the adjustment yourself.

4. Entering an incorrect value in a field

   • Your income tax form from your employer (i.e., T4) can have upwards of 20 fields to copy. Some of these fields have only minor differences from one another, so it’s not surprising they can be copied over incorrectly.

Use your Canada Revenue Agency ‘My Account’ to change your return

Now that you know what you’d like to change, the process is straightforward. The first step is to create or login to your CRA My Account. This is a secure digital portal where you can view your tax information and change previous returns. When you first sign in, you’ll see a button to ‘Change my return’ under the ‘Tax returns’ section.

You can only change one year’s return at a time. If you made a mistake in the most recent year, select that year from the drop-down and click ‘Next.’ However, if you realize you made a mistake several years ago, you’ll need to start with that year and may need to adjust the following years afterwards. For example, if you forgot to claim a tax benefit in 2016, you’ll need to first make a claim in 2016 and then may need to adjust 2017 through 2019 afterwards. Each time you submit a change to a tax return, you’ll need to wait for CRA to send you a Notice of Reassessment before you can proceed with a new change.

If you’re not comfortable making the changes yourself, you can work with a friend or family member you trust, or seek assistance from a professional (e.g., accountant). It’s worth considering the benefit you’ll receive (e.g., lowering your taxes, avoiding a penalty from CRA) against the cost and time to make the change.

Closing remarks

I made an error on my 2014 and 2015 tax returns that I realized and corrected in 2016. I hadn’t realized that expenses I was paying to complete licensing exams for my job qualified for the tuition tax credit. In 2016 I changed my 2014 tax return, waited for my Notice of Reassessment and then changed my 2015 tax return. The process took roughly 3 hours over several weeks and earned me ~$600 in tax rebates, well worth the effort. Learn more about why we pay taxes in Canada and how you can avoid paying more than your fair share.