Did you receive the CERB benefit? Find out what happens come tax time.
/As 2020 comes to a close, many people likely didn't give much thought as to how the benefit would affect their taxes. It is time to check and see if you might owe any income tax on the emergency benefit money you received this year.
If you received the CERB benefit, the amount you received is considered taxable income and the government will be issuing you a tax slip outlining the amount to include as income for your 2020 tax return. The amount you might owe depends on how much other income you earned this year before or after you received CERB payments and what other deductions and tax credits you might have.
Another important note is eligibility. Many people are realizing that they were not actually entitled to some of the money they received, and CRA is now issuing letters to Canadians for repayment of benefits. CRA is comparing the payroll records of employers with the information of CERB claimants to ensure individuals that have returned to work and have become ineligible for the CERB repay those amounts.
Prepare for tax season
The best thing you can do is be prepared. Get as much information as you can regarding your financial situation. If you think you might owe the government, then set some money aside now so you will be prepared come spring. Here are some key points to keep in mind.
The federal basic personal amount is $13,229 for 2020. If you received the maximum CERB amount of $14,000 (no tax was deducted from payments), then you will owe tax.
If you had any other income in January, February or early March or you went back to work or worked part-time and had some bit of income on the side, you are going to owe tax.
Keep in mind you may have other deductions and tax credits. The new temporary COVID -19 work-from-home tax deduction may apply to you.
Self-employed Canadians were eligible for CERB if they made more than $5,000 net income in 2019 or within the 12 months before they applied. If you thought the $5,000 limit was gross income then you will owe tax.
If you are concerned you might need to repay CERB, please contact the CRA at 1-833-966-2099. If your CERB payment came from EI/Service Canada, please contact EI/Service Canada.