Tax interest relief if you received COVID-19 emergency benefits
The Canada Revenue Agency (CRA) and Revenu Québec won’t charge interest on the taxes you owe from your 2020 return until April 30, 2022 if you received COVID-19 emergency benefits.
You’re eligible for this interest relief if your taxable income is less than $75,000 and you received any of the following emergency benefits in 2020:
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Recovery Sickness Benefit (CRSB)
- Employment Insurance (EI) benefits
- Incentive Program to Retain Essential Workers (IPREW)
- Similar provincial emergency benefits
You’ll still need to file your return by April 30, 2021 to avoid late filing penalties.
Many self-employed Canadians won’t have to repay the CERB
In February 2021, the federal government announced that if you mistakenly applied for the CERB based on having a gross income of at least $5000 in 2019 (the amount you made before subtracting your work-related expenses), you’re no longer required to pay back your benefits.
This means you might not have to repay your CERB amounts if:
- You’re self-employed,
- You earned at least $5000 in 2019 before subtracting your expenses, and
- You meet other eligibility requirements
If you already repaid your CERB amounts, don’t worry! The CRA and Service Canada will be giving back the repaid amounts to anyone who’s now considered eligible for them. More details about these repayments are coming soon.
Proposed changes to COVID-19 benefits and EI regular benefits
On February 19th this year, the federal government proposed changes to some COVID-19 benefits and EI regular benefits. If these changes are approved, they would
- Add more weeks to qualify for the Canada Recovery Benefit (CRB) and Canada Recovery Caregiving Benefit (CRCB), so you’d be able to receive these benefits for up to 38 weeks (the current limit is 26 weeks);
- Add more weeks to qualify for the Canada Recovery Sickness Benefit (CRSB), so you’d be able to receive this benefit for up to 4 weeks (the current limit is 2 weeks); and
- Add more weeks to qualify for EI regular benefits if you apply between September 27, 2020 and September 25, 2021, so you’d be able to receive these benefits for up to 50 weeks (the current limit is 26 weeks).
These changes aren’t official yet, but more details are coming soon.
RRSP contribution deadline for 2020
The deadline to contribute to your Registered Retirement Savings Plan (RRSP) was March 1, 2021. This means you’ll need to report any contributions you made to your or your spouse’s RRSP between the following dates on your 2020 return:
If your contributions are more than your RRSP deduction limit, you might need to pay a penalty tax.
New tax credits for Albertans: Working Parents Benefit and Critical Workers Benefit.
The provincial government introduced two new tax credits for residents of Alberta: the Working Parents Benefit and the Critical Workers Benefit.
Working Parents Benefit
This is a one-time, tax-free payment of $561 per child for families who paid for childcare so that they could continue working during the pandemic and whose annual household income is less than $100,000.
The amount you receive for the Working Parents Benefit will lower the amount you can claim for childcare expenses on your 2020 return. However, you’ll still be better off applying for this benefit. Claiming your childcare expenses will only lower the taxes you owe, whereas claiming this benefit will mean putting money in your pocket. If you’ve already filed your 2020 return but want to apply for this benefit, you’ll need to request a change to your return.
To apply, visit the provincial government website. Depending on where you live, applications open between March 1 and March 6, 2021. All applications will be open until March 31, 2021. Keep in mind, if you also received COVID-19 relief benefits or EI benefits, you won’t be eligible for this benefit.
Critical Workers Benefit
This is a one-time payment of $1,200 for critical workers. To be eligible for this benefit:
- You must work in public healthcare, social services, or education; or
- You must be a private sector worker who delivers critical basic services to Albertans (such as grocery clerks, security staff, or delivery drivers), and you must
- earn $25/hour or less,
- have worked at least 300 hours between October 12, 2020 and January 31, 2021, and
be located and working in Alberta.
For a full list of eligible and ineligible workers, visit the provincial government website.
If you work in the private sector or if you’re an eligible worker in a First Nations community, your employer must apply for this benefit on your behalf by March 19, 2021. To apply, visit the provincial government website.
These support payments will be subject to payroll deductions (including tax and EI deductions) if you receive them. You’ll find this amount included with your regular salary on your T4 slip. You’ll need to report this amount when you prepare and file your return.
Keep in mind that these support payments will be included in your income for 2020, so they might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.
Remember to report your cryptocurrency transactions this year
If you earned, spent, or traded cryptocurrency (such as Bitcoin) this year, you’ll need to report your income or losses on your return as you would any other business or investment transaction. Depending on how you used cryptocurrency, you might report these transactions as business income on the Statement of business or professional activities form (T2125 and TP-80), or as capital gains on Schedule 3 (and Schedule G, if you’re a resident of Québec).
The deadline to file is currently April 30, 2021. If you’re self-employed, the deadline is June 15, 2021. Keep in mind, if you’re self-employed but owe taxes this year, your deadline to pay what you owe is still April 30, 2021.