Notice of Assessment
Also known as: NOA
A Notice of Assessment is the statement a tax authority issues after processing a return, showing what it calculated you owe or are owed and whether it changed anything you reported.
Why it matters
Receiving one does not mean the return is settled permanently — a return can be reassessed later. The figure to check first is not the refund amount but whether the authority altered any line you filed, because a silent adjustment is how most people discover a slip was missing or double-counted.
In Quebec
A Quebec filer receives two: a federal Notice of Assessment from the Canada Revenue Agency and a separate notice from Revenu Québec. They can disagree, and each must be responded to separately.
Reassessment
A reassessment is a revised assessment of a tax year that a tax authority issues after the original one, changing the amount owed or refunded.
Why it matters
Reassessments arrive for mundane reasons far more often than suspicious ones: a slip filed by an employer after you filed, a matching program flagging a discrepancy, or an adjustment you requested yourself. There is a normal window during which a year stays open to reassessment, extended without limit where a return was not filed or where misrepresentation is alleged — so an unfiled year never becomes safe by ageing.
Notice of Objection
A Notice of Objection is the formal filing that disputes an assessment or reassessment and starts an independent review of it.
Why it matters
It is a deadline-driven process, and the deadline runs from the date on the notice rather than from when you opened the envelope. Paying the balance does not concede the dispute, and objecting does not by itself stop interest from accruing — those are two separate decisions people often conflate.
In Quebec
Federal and Quebec objections are filed separately with their own forms and deadlines. Winning one does not automatically resolve the other.
T4 slip
Also known as: Statement of Remuneration Paid
A T4 is the federal slip an employer issues reporting employment income paid during a calendar year and the amounts withheld from it — income tax, Canada Pension Plan or Quebec Pension Plan, and employment insurance.
Why it matters
The number to reconcile is not your salary but the amount in the employment-income box, which reflects what was actually paid in the calendar year and includes taxable benefits you may never have seen as cash. Employers file copies with the tax authority, which is why an omitted slip reliably produces a reassessment rather than going unnoticed.
In Quebec
A Quebec employee receives both a federal T4 and a provincial RL-1, and the two report overlapping but not identical figures. Filing with only one of them will produce a mismatch on the other return.
RL-1 slip (Relevé 1)
Also known as: Releve 1, Relevé 1
The RL-1 is the Quebec slip an employer issues reporting employment income and provincial withholdings, used to prepare the Quebec return.
Why it matters
It is the provincial counterpart to the T4, not a duplicate of it: certain benefits are taxable in one jurisdiction and treated differently in the other, so the boxes do not always agree. This is the single most common source of confusion for people who move to Quebec and expect one slip per employer.
RL-31 slip
The RL-31 is a Quebec slip a landlord must issue to tenants who occupied a leased dwelling on December 31, confirming the unit and lease information a tenant needs to claim the solidarity tax credit.
Why it matters
It matters in both directions. A tenant without one may be unable to claim the housing component of the credit; a landlord who fails to issue them is exposed to penalties per slip. It is a filing obligation attached to owning rental property, not an optional courtesy.
Solidarity tax credit
The solidarity tax credit is a refundable Quebec credit combining housing, sales-tax, and northern-village components, paid out over the year rather than as a single refund line.
Why it matters
Because it is refundable, it can be received by people with no tax payable — which is precisely why filing a return matters even at very low income. Eligibility for the housing component generally depends on holding an RL-31 for the dwelling, so a missing slip quietly reduces the amount received.
Refundable vs non-refundable credit
A refundable credit can be paid to you even if it exceeds the tax you owe. A non-refundable credit can only reduce tax payable to zero; any excess is lost or, for some credits, carried forward or transferred.
Why it matters
This distinction decides whether filing is worthwhile at low income. Someone with no tax payable gains nothing from a large non-refundable credit but can still receive refundable ones — so "I earned too little to owe tax" is a reason to file, not a reason to skip it.
Tax credit vs deduction
A deduction reduces the income on which tax is calculated. A credit reduces the tax itself, after it has been calculated.
Why it matters
The consequence is that a deduction is worth more to someone in a higher bracket, while a credit at a fixed rate is worth the same to everyone who can use it. This is why comparing the raw dollar amounts of a deduction and a credit tells you nothing about which reduces your bill more.
Marginal tax rate
Your marginal tax rate is the rate applied to your next dollar of income — the rate of the bracket you are currently in, not an average across all your income.
Why it matters
Canada and Quebec both use graduated brackets, so entering a higher bracket re-rates only the income above that threshold, never your whole income. The widespread fear that a raise can leave you worse off is almost always a misreading of this. The real cliff effects come from income-tested benefits phasing out, not from the brackets themselves.
In Quebec
A Quebec resident pays federal and Quebec tax on the same income, so the effective marginal rate is the combination of both — reading only the federal bracket understates it substantially.
Employment income
Employment income is what you receive as an employee — salary, wages, commissions, bonuses, tips, and taxable benefits — reported on a T4 and, in Quebec, an RL-1.
Why it matters
It is taxed differently from self-employment income in ways that go beyond the rate: tax is withheld at source, the range of deductible expenses is far narrower, and there is no obligation to remit instalments or register for sales tax. Being paid without withholding does not make income untaxable; it usually means the obligation to remit has shifted to you.
Self-employment income
Also known as: business income
Self-employment income is what you earn carrying on a business on your own account, including freelance, contract, gig, and professional work, reported as gross revenue less deductible business expenses.
Why it matters
Three obligations arrive with it that employees never face: tracking and substantiating expenses, potentially remitting sales tax once revenue passes the registration threshold, and paying tax by instalment instead of through withholding. The most common failure is not underreporting income but discovering a large balance owing with no withholding to cover it.
In Quebec
A self-employed Quebec resident may need to register for both GST and QST, and Quebec administers QST itself, so registration and remittance run through Revenu Québec.
Deductible business expense
A deductible business expense is a cost incurred to earn business income, subtracted from revenue to arrive at the profit that is taxed.
Why it matters
Two tests decide most cases: the expense must have been incurred to earn income, and where an item serves both business and personal purposes only the business proportion is deductible. The practical requirement is documentation — a claim you cannot substantiate with a record is not a deduction you can defend, regardless of whether it was genuinely incurred.
GST and QST
Also known as: TPS, TVQ, sales tax
GST is the federal goods and services tax and QST is the Quebec sales tax. A business whose taxable revenue exceeds the small-supplier threshold must register, charge them on taxable supplies, and remit the balance after claiming input tax credits.
Why it matters
The tax collected is never the business’s money — it is held on behalf of the authority, and spending it is the most common cause of unmanageable sales-tax debt among small businesses. Registration also cuts both ways: it creates a remittance obligation but also allows recovery of the tax paid on business inputs, which can favour voluntary registration below the threshold.
In Quebec
Revenu Québec administers both GST and QST for most Quebec businesses, so a single registration and filing channel usually covers both.
Instalment payments
Instalments are periodic prepayments of income tax required when too little tax is withheld at source, paid during the year rather than as a single balance at filing.
Why it matters
The obligation is triggered by how much tax you owe at filing, not by being self-employed — retirees with investment income and employees with large non-employment income are routinely caught by it. Interest applies to instalments that were required and not paid, and it accrues from each missed date, so the cost of ignoring them compounds through the year.
In Quebec
Federal and Quebec instalments are calculated and remitted separately. Paying only one leaves interest running on the other.
Late filing and prior-year returns
A late-filed return is one submitted after its due date. Prior-year returns are returns for tax years already past, which can still be filed after the deadline.
Why it matters
Late filing carries a penalty calculated on the balance owing plus interest, and the penalty rate increases for repeat late filing. Two points are widely misunderstood: a return with no balance owing generally attracts no late-filing penalty, and filing late is materially better than not filing, because unfiled years stay open to reassessment indefinitely and block benefit payments that depend on an assessed return.
Rental income
Rental income is what you receive from renting out property, reported as gross rent less deductible expenses such as mortgage interest, property tax, insurance, and maintenance.
Why it matters
The distinction that causes the most trouble is between a current expense and a capital expenditure: a repair that restores the property is generally deductible in the year, while an improvement that betters it is added to the property’s cost and recovered differently. Claiming a capital improvement as a repair is one of the most frequently adjusted items on a rental schedule.
In Quebec
A Quebec landlord also has the RL-31 obligation for tenants occupying a dwelling on December 31.
Capital gain
A capital gain is the amount by which the proceeds from disposing of a capital property exceed its adjusted cost base and the costs of disposing of it. Only a portion of a capital gain is included in taxable income.
Why it matters
A gain is generally realised on disposition, not while an asset appreciates — but "disposition" is broader than selling, and can include gifting, changing a property’s use, or ceasing to be a resident. Because only part of the gain is taxable, capital gains are taxed more lightly than an equivalent amount of employment income, which is why how a transaction is characterised matters as much as its size.
Adjusted cost base (ACB)
The adjusted cost base is the cost of a property for tax purposes, adjusted over time for items such as purchase costs, capital improvements, and reinvested distributions.
Why it matters
ACB is where most capital-gains errors originate, because it must be tracked across the entire holding period and nobody reconstructs it well years later. Reinvested distributions and return-of-capital amounts change it silently, so an investor who uses the original purchase price as the cost base will usually overstate the gain and overpay.
Principal residence exemption
The principal residence exemption can eliminate the capital gain on the disposition of a property that qualified as your principal residence for the years you designate it as such.
Why it matters
The exemption is not automatic in practice: the disposition must be reported and the designation made, and failing to report it can attract a penalty even where no tax is ultimately owed. Only one property per family unit can be designated for a given year, which is what makes second properties and cottages complicated rather than the exemption itself.
RRSP
Also known as: Registered Retirement Savings Plan, REER
An RRSP is a registered plan in which contributions are deducted from income in the year claimed, investment growth is not taxed while it stays inside the plan, and withdrawals are taxed as income.
Why it matters
An RRSP defers tax rather than eliminating it, so its benefit depends on your rate when contributing versus when withdrawing. Contribution room accumulates based on earned income and carries forward if unused, and the deduction can be carried forward too — meaning a contribution made in a low-income year can be deducted in a later higher-income one. Over-contributing beyond the allowed buffer attracts a monthly penalty.
TFSA
Also known as: Tax-Free Savings Account, CELI
A TFSA is a registered account funded with after-tax dollars in which investment income and withdrawals are not taxed. Contributions are not deductible.
Why it matters
The mirror image of an RRSP: no deduction going in, nothing taxable coming out. Withdrawn amounts are added back to contribution room, but only in the following calendar year, which is the mechanism behind most accidental over-contributions — re-depositing a withdrawal in the same year uses room you no longer have, and the penalty accrues monthly on the excess.
Residency for tax purposes
Residency for tax purposes determines what income a jurisdiction can tax and is decided by the facts of your ties to that jurisdiction, not by citizenship or immigration status.
Why it matters
A resident of Canada is generally taxable on worldwide income; a non-resident only on certain Canadian-source income. Because the test is factual, the year of arrival or departure is where errors concentrate — residency can begin or end partway through a year, which changes both what must be reported and how credits are prorated.
In Quebec
Provincial residency is normally determined as of December 31 and decides which province’s return you file, so moving into or out of Quebec late in the year changes which provincial return applies for the whole year.
First return as a newcomer
A newcomer’s first Canadian return covers the part of the year after residency began, and reports world income for that period along with details of income earned before arriving.
Why it matters
Pre-arrival income is not taxed but is still requested, because it is used to prorate income-tested credits — which is why leaving it blank often reduces the credits a newcomer receives rather than simplifying the return. Filing the first return also establishes the record that later benefit and credit payments depend on.
Source deductions
Also known as: withholding at source
Source deductions are the amounts an employer withholds from pay and remits on your behalf — income tax, pension-plan contributions, and employment insurance or parental insurance premiums.
Why it matters
Withholding is an estimate, not a settlement: it is calculated as though your current pay were your only income for the year. Anyone with multiple employers, mid-year job changes, or significant non-employment income is routinely under-withheld and finds a balance owing at filing, without anything having gone wrong.
In Quebec
Quebec employees have Quebec Pension Plan and Quebec Parental Insurance Plan deductions in place of some federal equivalents, and provincial income tax is withheld separately.
