Throughout 2020, the Canadian government introduced several income-support benefits to help Canadians and their families cope with the COVID-19 pandemic and the impact it had on businesses, employees and vulnerable populations.
Initially, employed and self-employed Canadians could apply for the Canada Emergency Response Benefit (CERB) that was distributed by the Canada Revenue Agency (CRA) or Service Canada platforms. The CERB provided individuals with a taxable benefit of $500 per week for a maximum of 28 weeks (about 6 and a half months), between March 15, 2020 and September 26, 2020, if you met the qualification requirements.
If you received the CERB, you will need to report the amount as income for the 2020 income tax year. T4A and T4E slips have been issued by the CRA and Service Canada and are to be included when filing your 2020 income tax return.
What other COVID-19 related income support benefits will be taxed?
As the pandemic continued into the summer of 2020, a new income support benefit called the Canada Emergency Student Benefit (“CESB”) was offered to students who were unable to find summer employment. Similar to the CERB, the government did not withhold income taxes when they paid the CESB.
When the CERB and CESB programs ended in the fall of 2020, the federal government released three new benefit programs to assist those who were not qualified for Employment Insurance (EI). Those benefits were:
- Canada Recovery Benefit (CRB);
- Canada Recovery Sickness Benefit (CRSB); and
- Canada Recovery Caregiving Benefit (CRCB).
Like the CERB and CESB, these three programs are taxable, and amounts received from these five benefits are to be reported when you file your 2020 income tax return.
Why did I receive a T4A slip from the CRA?
If you received the CERB, CESB, CRB, CRSB or CRCB payments from the CRA before December 31, 2020, you will receive a T4A slip from the CRA (residents of Quebec will receive both a T4A and RL-1 slip). The CRA began distributing the T4A slips in January 2021 and you should receive your slip before March 10, 2021.
If you received payments from one or more of the federal government’s income support benefits in 2020 and you do not have your T4A slip by March 10, 2021, then you may obtain an electronic copy of the T4A information from your CRA My Account portal.
On the T4A slip, each COVID-19 benefit received will have its own box number and you will want to ensure that each amount showing for funds received or repaid is correct. You can confirm the various amounts you received under the “COVID-19 Support Payment Application Details” on your CRA My Account.
Why did I receive a T4E slip from Service Canada?
If you received CERB payments from Service Canada, they will send you a T4E slip that will include the gross amount of CERB and EI Benefits that were paid to you, income tax deducted and the amount paid towards any overpayment of EI. If you are a resident of Quebec, you will receive a T4E(Q).
If you do not receive your T4E slip by mid-March, you can obtain a copy of the T4E online as of February 1 through the My Service Canada Account portal.
I already made a payment towards my CERB overpayment. Will that appear on my T4A or T4E slip?
For individuals who received CERB and CESB payments when they were not eligible and made a repayment towards the amount owed, any amounts repaid to the CRA or Service Canada prior to December 31, 2020 will appear as a deduction on your 2020 T4A or T4E slip.
Any CERB or CESB repayments received by the CRA after December 31, 2020 will be reported on a 2021 T4A slip issued in 2022 and will be a deduction on your 2021 personal tax return.
Additional government benefits to consider.
The Canadian government also delivered a number of one-time payments in 2020 that were not taxable, including, but not limited to:
- The additional GST/HST credit payment in April 2020.
- An additional Canada Child Benefit (CCB) payment to a maximum of $300 per eligible child in May 2020.
- A onetime $300 payment to seniors eligible for the Old Age Security pension in July 2020.
- An additional $200 payment for seniors eligible for the Guaranteed Income Supplement in July 2020.
This year more than ever, given all the above, it is important to take the time to review your income tax slip information carefully and to make sure you file your 2020 tax return by the applicable filing deadline. Receiving assistance from a tax professional can be a great option if you owe tax for 2020 or you are feeling overwhelmed with the filing of your personal tax return this year.