The 90-Day Clock: What to Do With a Notice of Reassessment

Ninety days. A Notice of Reassessment carries a date, and subsection 165(1) of the Income Tax Act gives a taxpayer until 90 days after that date to file a Notice of Objection — the formal, legislated step that opens a dispute. The window runs from the date printed on the notice, not from the day it is opened, forwarded by a bookkeeper, or first understood. Mail delay is counted against the taxpayer, not CRA, so a notice that sits unread for three weeks has already spent three weeks of the clock.

The objection is filed on Form T400A, Notice of Objection – Income Tax Act, or through the "Register my formal dispute" service in CRA My Account, My Business Account, or Represent a Client. A valid objection does more than signal disagreement: it must set out the facts and the reasons, and identify the issues in dispute. A one-line "I disagree" preserves the date but wastes the filing.

One refinement matters for individuals and graduated rate estate trusts. For them the deadline is the later of the 90-day date or one year after the return's filing-due date for the year, so an early reassessment can leave slightly more time. The reliable discipline, though, is to treat the 90-day date on the notice as the deadline and work back from it — never to hope the longer measure applies.

For income tax, largely yes — with important limits. Section 225.1 of the Income Tax Act restricts CRA from collecting most disputed income tax while an objection or appeal is outstanding, generally until 90 days after the objection is decided. That restriction is one of the strongest practical reasons to object rather than to let the deadline pass: it holds the collections machinery back while the merits are considered.

The restriction is narrower than it sounds. It does not apply to large corporations in full — CRA may collect half of the amount in dispute from them during the objection. It does not extend to payroll source deductions, which are trust amounts CRA can pursue immediately. And it is a provision of the Income Tax Act only: a GST/HST reassessment is governed by the Excise Tax Act, which contains no equivalent hold, so CRA can continue to collect disputed GST/HST even while an objection to it is under review.

Interest is the part that never pauses. Arrears interest continues to compound daily on any unpaid balance at the prescribed rate throughout an objection, whichever statute applies. A collection hold is a stay, not forgiveness — the meter keeps running while the dispute is decided.

The position narrows, but it is not always closed. A taxpayer who misses the 90-day window may apply for an extension of time to object under section 166.1 of the Income Tax Act. The application must be made within one year after the objection deadline expired — so, in practice, an outer window of roughly one year and 90 days from the date on the notice. It is discretionary: CRA must be satisfied that there was a genuine intention to object, that the taxpayer could not act or instruct someone to act in time, and that granting it is just and equitable. If CRA refuses, the same application can be taken to the Tax Court of Canada under section 166.2.

Taxpayer relief is a different remedy, and the difference is easy to miss. Form RC4288, Request for Taxpayer Relief, asks CRA to cancel or waive penalties and interest under subsection 220(3.1) — for circumstances such as serious illness, CRA error, or financial hardship. It reaches back up to ten calendar years. What it does not do is dispute whether the underlying tax is correct. Relief can strip penalties and interest from a reassessment; only an objection can challenge the tax itself.

The order of these routes is not interchangeable. An objection protects the whole assessment and has the tightest deadline; the extension application rescues a missed objection; taxpayer relief addresses the penalties and interest layered on top. Confusing the three — filing for relief when an objection was the point — is how recoverable positions are lost to the wrong form.