Canada introduced several benefits last year in response to the COVID-19 pandemic that may affect your tax situation. Make sure you know what to expect as you prepare your 2020 tax return!
Canada Emergency Response Benefit (CERB)
- No tax was withheld initially.
- Report as additional income on your 2020 return.
- The amount you’ll owe depends on your tax rate, which may increase when you combine your income before the pandemic with the benefit amount received.
Canada Recovery Benefit (CRB)
- 10% tax withheld upon distribution.
- If your tax rate is higher than 10%, you will need to pay the difference.
- CRB recipients must pay back half of whatever they make over $38,000, excluding the CRB itself. So if you earned $45,000 in 2020 without the benefit, you made $6,000 over the limit, which means you’ll need to repay $3,000 at tax time.
Canada Recovery Caregiving Benefit
- 10% tax withheld upon distribution, must pay the difference if your tax rate is higher
Canada Recovery Sickness Benefit
- 10% tax withheld upon distribution, must pay the difference if your tax rate is higher
Don’t Forget the Home Office Deduction! If you began working from home this year, you could qualify for a tax break.
Check the CRA’s website for eligibility requirements on other tax incentives for homeowners, such as:
- Home buyers’ amount
- Ontario senior homeowners’ property tax grant (OSHPTG)
- Ontario energy and property tax credit (OEPTC)
- Home accessibility tax credit (HATC)
- GST/HST new housing rebate
Online Tax Calculators for you to try:
• EY Tax Calculator
• TurboTax Canada
• Simple Tax
Please reach out if you need the recommendation of a great accountant or tax specialist in the area!
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