2021 was another year where Canadians felt the influence of ongoing pandemic measures. The government has continued to offer support to those affected by COVID-19, which means another unique year when it comes to filing your taxes.
With so many tax changes over the past year, it can be difficult to understand how they’ll impact your tax return. That’s why TurboTax is here to keep things simple and provide you with all the info you need related to COVID-19 and how it affects your filing this season.
- All COVID-19 benefits are taxable and need to be reported when filing your taxes this season.
- Your benefits are handed out with tax already withheld, but the CRA still needs their details to calculate your return properly.
- There are several additional credits and deductions that apply due to COVID-19 circumstances, so make sure to claim as many as possible for the best tax outcome.
How are COVID-19 benefits taxed, and at what rate?
COVID-19 benefits have had tax withheld at the source. In other words, they’re already adjusted to cover the taxable portion of what’s given to you, at the rate of 10%.
But that doesn’t mean you don’t have to report these benefits while filing. Depending on your remaining income and other factors, you might still be on the hook for taxes. To make sure your return is properly assessed, you do need to report these benefits while filing.
Do I need to repay my COVID-19 benefits?
You might need to repay your COVID-19 benefits back to the government if:
- you applied for the CRCB and later found out you do not meet the eligibility criteria
- you received a payment in error
- you received a payment for the same period as another member in your household
If you repay the benefit amount before December 31 in the same year you received it, you can only deduct it from that year. If you repaid a benefit between Dec 31, 2021 and January 1, 2022, you can choose to either deduct it this year or claim the deduction when filing next year.
Based on the income you’re reporting, you will need to reimburse $0.50 of the CRB for every dollar of net income you earned over $38,000 on your 2021 income tax return.
You won’t have to pay back more than the benefit amount you got for the year, but any amounts you still owe will be included as part of your total balance owing for your 2021 taxes, so make sure to keep them in mind.
Which tax forms do you need to report income from COVID-19 benefits?
If you received any amounts from the following COVID-19 benefits, you’ll get a T4A slip outlining your benefit details for 2021:
- Canada Emergency Response Benefit (CERB) with the CRA
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Recovery Sickness Benefit (CRSB)
- Canada Worker Lockdown Benefit (CWLB)
- Provincial or territorial COVID-19 financial assistance payments
You’ll also get a T4E slip if you received CERB benefits from Service Canada or Employment Insurance (EI) benefit payments at any point during the year.
You might have already received some of these forms in the mail or online, so make sure to keep these forms handy when preparing your tax return.
What if I still didn’t receive all my slips?
If you still haven’t received all your tax forms or slips yet, don’t panic. Your first step should be to use your CRA My Account to access your tax information and forms (including T4 and T4A) online. If you’re looking for your T4E form, you can also access it online through your My Service Canada Account.
If your employer or any other party responsible for providing forms hasn’t provided the forms yet, follow up with them ASAP to make sure they haven’t forgotten about it, and confirm what delivery method they’re using to get them to you.
Are there any additional COVID-19 tax credits and deductions I can claim?
There are a number of credits and deductions that also cover unique situations brought about by COVID-19. If any of these apply to you, you should definitely claim them when filing.
Work from home tax credit
This tax credit allows Canadians working from home due to the pandemic to deduct some of their remote work expenses. You can claim up to $500 for the 2021 tax year if you use the flat rate method of $2 for each day you worked from home.
Digital News Subscription Tax Credit
If you paid for a digital news subscription to a qualified Canadian journalism organization, you can claim up to $500 for it on your taxes.
Canada Training Credit
If you paid eligible tuition and fees for courses taken in 2021, you can claim the Canada Training Credit, which offers up to $250 each year, up to a lifetime maximum of $5000. If you’ve opted to retrain for a different line of work due to COVID-19 or for any other reason, this is a great benefit to claim.
What should I know about COVID-19 benefits if I’m self-employed?
There’s a range of COVID-19 benefits available to business owners, entrepreneurs, and self-employed including:
- Canada Emergency Wage Subsidy (CEWS)
- Canada Emergency Business Account (CEBA)
- Canada Emergency Rent Subsidy (CERS)
- Large Employer Emergency Financing Facility (LEEFF)
- Work-Sharing (WS) program
Self-employed workers are also eligible for all individual benefits for employed workers, including the CERB, CRB, CRSB, and CRCB.
Is there a due date extension for filing taxes this year?
The personal tax return filing deadline for your 2021 tax return is May 2, 2022, since April 30 falls on a weekend.
For self-employed returns, there’s a little more leeway with a deadline of June 15, 2022, but if you owe taxes, the CRA starts assessing interest on May 2 so it’s a good idea to file earlier.
How can I be prepared for my taxes this year?
At TurboTax, we offer free tools and resources to help you make it through tax season smoothly:
- Get organized with our free tax checklist, which tells you everything you need to file your 2021 return on time and accurately.
- Estimate your tax refund or taxes owing quickly with the Canada income tax calculator.
- Check out the tax calendar, which provides a full breakdown of the tax filing timeline for 2022.
- Join our community to connect with experts and other users who share your experiences and ask any questions you may have while filing your taxes.
Get the tax support you deserve.
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