How to Correct a Tax Return After Filing: T1 Adjustment vs Reassessment – A Complete Guide by a Montreal CPA Firm Near You

Introduction

It is extremely common for Canadians to realize after filing that they forgot a slip, claimed the wrong amount, missed a credit, or entered incorrect information. The good news: CRA allows you to correct your return without penalty when done properly. The key is knowing whether to file a T1 Adjustment (T1-ADJ) or respond to a Notice of Reassessment, and how each process affects your rights, refunds, and deadlines. This guide explains how to fix mistakes safely, avoid unnecessary reassessments, and ensure CRA accepts your corrections the first time.

Legal and Regulatory Framework

Tax return corrections are governed by the Income Tax Act, CRA administrative policy, and electronic filing guidelines. Taxpayers can request adjustments for up to 10 years from the end of the tax year. Adjustments may correct income amounts, deductions, credits, RRSP limits, tuition transfers, rental income, capital gains, and foreign reporting mistakes. CRA may also issue a reassessment after receiving new slips or audit results. Taxpayers must follow the correct correction method to maintain appeal rights and avoid delays.

Key Court Decisions

In Bozzer v. Canada, the Federal Court of Appeal confirmed the 10-year limitation on corrections and interest relief. In Lalonde v. Canada, the court emphasized the importance of clear evidence when adjusting prior-year returns. In LeBlanc v. Canada, CRA’s refusal to adjust was overturned because the taxpayer provided adequate documentation. These cases show that CRA must accept valid corrections supported by proof.

Two Ways to Correct a Tax Return

1. Filing a T1 Adjustment (T1-ADJ or Change My Return)

This is the proper method when you initiate the correction.

2. Responding to a CRA Reassessment

This applies when CRA initiates a correction and you disagree with their changes.
Each method has different rules, procedures, and deadlines.

When to File a T1 Adjustment

A T1 Adjustment should be filed when you need to correct: missing T4/T5 slips, employment income errors, missed tuition credits, childcare expenses, medical expenses, RRSP contributions, charitable donations, rental income adjustments, capital gains corrections, moving expenses, or disability tax credit claims. You can file online using CRA’s Change My Return feature or via paper Form T1-ADJ.

What You Need to Support a T1 Adjustment

CRA requires complete documentation, including: slips, receipts, medical statements, tuition certificates, RRSP contribution receipts, capital gains calculations, foreign income proof, and any supporting contracts or agreements. Incomplete submissions delay processing or result in denial.

Processing Times

T1 Adjustments usually take:

• 2 to 8 weeks via online submission

• 8 to 16 weeks for paper submissions
  Complex claims may take longer.

When CRA Issues a Reassessment

CRA may reassess your return due to: matching program discrepancies, missing slips, late employer amendments, corrected T4/T5/T4A(P), GST/HST adjustments, audit findings, medical claim reviews, tuition claim discrepancies, or real estate transaction reviews. A reassessment replaces your original assessment and may increase taxes owing or reduce your refund.

If You Disagree With a Reassessment

You must file a Notice of Objection within 90 days of the date on the Notice of Reassessment. Filing a T1 Adjustment at this stage is a mistake—only a formal objection protects your appeal rights.

T1 Adjustment vs Notice of Objection (Key Differences)

Purpose

T1-ADJ: Correct taxpayer errors
Objection: Challenge CRA errors

Deadline

T1-ADJ: Up to 10 years
Objection: 90 days

Outcome

T1-ADJ: CRA may accept or deny based on documentation
Objection: CRA Appeals conducts independent review

Collection Protection

T1-ADJ: Does NOT pause collections
Objection: Pauses most income-tax collection actions

Common Mistakes When Correcting Returns

Taxpayers often: file multiple adjustments at once (causing conflicts), submit adjustments instead of objections, fail to include documentation, miscalculate capital gains, forget foreign income rules, or attempt to correct GST/HST using a T1 (incorrect). These errors delay refunds or trigger audits.

How to Correct Multiple Years

Adjust each year separately. Include full documentation for each. If multiple years involve unreported income, consider the Voluntary Disclosures Program (VDP) to avoid penalties.

Correcting GST/HST or Corporate Returns

GST/HST corrections require Form GST189 or amended filings. Corporate T2 returns require amended schedules and financial statements. Do NOT use a T1 Adjustment for business or corporate corrections.

Mackisen Strategy

At Mackisen CPA Montreal, we handle tax corrections with precision. We analyze your errors, reconstruct supporting documents, prepare T1 Adjustments, file objections for incorrect CRA reassessments, negotiate with CRA Appeals, and ensure corrections are processed quickly and accurately. We also advise when VDP is the safer route.

Real Client Experience

A Montreal consultant recovered a $4,800 refund after we adjusted tuition transfers. A landlord corrected capital gains errors and avoided penalties. A retail employee reversed CRA’s denial of medical credits through an objection. A crypto investor corrected inaccurate exchange-reported income using our recalculations.

Common Questions

Can I adjust a return for any reason? Yes—if within 10 years and supported by documentation. Do adjustments trigger audits? Not usually when accurate. Can CRA deny adjustments? Yes—if unsupported. Should I file an objection instead? Only when CRA made the change.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures your tax corrections are accurate, strategic, fully documented, and compliant with CRA rules. We protect your right to refunds and help avoid unnecessary reassessments.