How to Correct a Tax Return After Filing: T1 Adjustment vs Reassessment

Introduction

Even the most careful taxpayers make mistakes on their tax returns — missing slips, incorrect deductions, forgotten credits, miscalculated capital gains, rental expense errors, crypto ACB mistakes, or income from platforms and part-time jobs. Fortunately, CRA allows taxpayers to correct their previously filed returns through a T1 Adjustment (T1-ADJ). Understanding the difference between a taxpayer-initiated adjustment and a CRA-issued reassessment is essential for correcting mistakes without triggering unnecessary reviews or penalties. This guide explains when to file an adjustment, how CRA processes changes, and how to fix your return safely and strategically.

When You Can Correct a Tax Return

You can correct a previously filed return if you:
missed income
missed deductions
missed tax credits
reported incorrect amounts
forgot to claim tuition, childcare, medical, or disability credits
underreported or overreported rental income
misclassified capital gains
incorrectly calculated crypto gains
claimed ineligible expenses
CRA allows adjustments for up to 10 previous tax years.

T1 Adjustment vs CRA Reassessment: The Difference

1. T1 Adjustment (T1-ADJ) — taxpayer initiated

Used when you notice an error after filing. Allows you to correct the return voluntarily.

2. Notice of Reassessment — CRA initiated

Issued when CRA corrects your return, often due to:
slip mismatches
audits
reviews
GST/HST discrepancies
capital gains corrections
real estate reclassification
Understanding which applies determines how you respond.

When to File a T1 Adjustment

You should file an adjustment when:
you received a slip late
you forgot an RRSP receipt
you found additional expenses (medical, childcare, moving)
you discovered business expense errors
you corrected crypto ACB calculations
you changed your interpretation of a tax position
The earlier you correct, the less interest will accumulate.

When NOT to File a T1 Adjustment

Do not file an adjustment if:
CRA has already sent you a reassessment for the same issue
CRA has already contacted you about the year
You need VDP, not a regular adjustment, if:
you failed to report income for multiple years
the error is significant
CRA has not contacted you yet
You need Taxpayer Relief, not an adjustment, if:
you want penalties or interest cancelled

Information Required for a T1 Adjustment

CRA requires:
the line number being corrected
the corrected amounts
supporting documents
explanations
slips, receipts, statements
crypto spreadsheets
rental income breakdown
business expense logs
Missing documentation may cause the adjustment to be denied.

How to File a T1 Adjustment

Option 1: CRA MyAccount (Most Common)

Navigate to:
“Change my return” → Select the year → Enter corrected amounts.

Option 2: T1-ADJ Paper Form

Complete:
personal info
tax year
line numbers
supporting documentation
mail to CRA

Option 3: Through Your CPA

Best for complex cases involving:
capital gains
crypto
rental properties
business income
foreign income
CRA trusts CPA-submitted adjustments more.

How CRA Reviews Adjustments

CRA may:
accept the change automatically
request supporting documents
open a review
open an audit
issue a new Notice of Reassessment
Small adjustments often process smoothly, but large corrections (rental, crypto, business, real estate) frequently trigger reviews.

What Happens After CRA Accepts the Adjustment

CRA issues:
a revised Notice of Assessment
a refund (if applicable)
or a balance owing (with interest)
Interest is always charged from the original due date, even when the adjustment is filed later.

How to Correct a Return After a CRA Reassessment

If CRA reassessed you incorrectly:
file a Notice of Objection within 90 days
provide documentation to dispute CRA’s assumptions
If CRA’s reassessment is correct:
you must pay, but you may apply for Taxpayer Relief to reduce interest.

Special Topics in T1 Adjustments

1. Crypto Errors

Incorrect ACB calculations
unreported staking income
missing exchange data
Crypto adjustments require full transaction logs.

2. Real Estate Errors

pre-construction assignments
misreported capital gains
partial principal residence claims
rental income/expense errors
Real estate adjustments frequently trigger reviews.

3. Rental Property Adjustments

missing expenses
capital vs current repairs
interest allocation
partial-use deductions
CRA often re-interprets rental deductions.

4. Business Income Adjustments

cash income
platform payouts
incorrect CCA
vehicle and home-office recalculations
Self-employed adjustments are carefully reviewed.

Avoiding Future Adjustment Needs

use CRA MyAccount to verify slips
wait to file until all slips are issued
track crypto throughout the year
organize rental receipts
track platform income (Uber, Lyft, Skip, Etsy, Shopify)
keep mileage logs
review return with a CPA
Correct bookkeeping prevents most errors.

Mackisen Strategy

At Mackisen CPA Montreal, we correct tax returns safely by preparing detailed adjustments, supporting documentation, ACB recalculations, rental and business reconciliations, and clear explanations for CRA. If CRA reassesses incorrectly, we file strong Notices of Objection backed by legal arguments and organized evidence.

Real Client Experience

A Montreal investor corrected years of capital gains after ACB errors. A landlord added missed rental expenses and received a large refund. A newcomer corrected foreign income reporting errors. A crypto trader fixed unreported staking income through a full T1 adjustment package. A contractor avoided penalties by voluntarily adjusting cash income.

Common Questions

How long do adjustments take? 2–12 weeks. Will CRA deny an adjustment? Yes, if unsupported. Can adjustments trigger audits? Yes, especially large ones. Can I adjust multiple years? Yes, up to 10 years. Should I fix mistakes myself? Risky for complex issues.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps taxpayers correct returns accurately, defend against CRA reassessments, and protect financial outcomes through strategic adjustments and expert representation.