The federal government launched the Canada Recovery Benefit (CRB) in September 2020 to replace the Canada Emergency Response Benefit (CERB). It was meant to provide continued support to people who lost their jobs or part of their income due to the pandemic. Do you know how to include the CRB in your tax return (yes, it's considered a taxable benefit)? Read on for more information.
Did you know?
According to federal government data, over 2.29 million Canadians had applied for the CRB as of November 2021.
At the start of the pandemic, the government wanted to move quickly to help people in need. That's why it launched the CERB.
Later on, the federal government wanted to adapt its assistance to each applicant's situation.
Not a citizen or permanent resident?
Your Canadian residency status wasn't considered in determining your eligibility for the CRB. However, you must have lived and had a home in Canada and met all other government requirements.
You could receive the CRB for up to 27 2-week periods (54 weeks total) if you were eligible between September 27, 2020 and October 23, 2021.
Amounts varied based on when you applied for them. Two main scenarios were possible:
For example: let's say you applied for the CRB in January 2021. Until July 17, 2021, you could receive $900 (after deductions) every two weeks. After that date, you could receive $540 (after deductions) every two weeks (up to the maximum of 27 applications or until October 23, 2021).
Let's say you earned a total of $10,000 in 2021. That means you'll have little or no income tax to pay. However, the greater your taxable income, the more tax you'll have to pay. That's how Canada's progressive tax system works.
You will have to:
If income tax is payable on these amounts, it will be included in your total tax bill.
Quick tip: To see exactly how much you received, check your tax slips (T4A or RL-1 if you live in Quebec). Make sure the amounts are correct, especially if you made repayments during the year.
A 10% portion of the CRB was already deducted from each payment. That's why if you were entitled to $1,000 or $600, you received $900 or $540 instead. It's similar to what happens when taxes are deducted from your pay.
The percentage withheld will be used to cover the income tax you owe. However, this 10% deduction may not be sufficient. It will depend on the total taxable income you declare.
Pro tip: A number of online calculators are available to help you estimate how much you'll have to pay. For a more specific answer and to help you avoid errors, speak to a tax specialist or accountant.
Did your net taxable income (after deductions), excluding the CRB, exceed $38,000? Then you will have to repay a portion of it. For every dollar earned that exceeds this threshold, you'll have to repay $0.50 of what you received under the Canada Recovery Benefit.
For example: Let's say your net income (not including the CRB) for 2021 was $40,000. That means you exceeded the $38,000 threshold by $2,000. You'll owe $0.50 on each of those $2,000, for a total of $1,000.
Good to know: You won't have to repay more than the total amount you received under the CRB during the year.
Did you receive the CRB even though you weren't eligible, or did you receive an excess amount?
You'll have to repay the excess amounts you received. Ideally, you should contact the Canada Revenue Agency to report the situation. If you don't have the money available, you could set up a repayment plan.
Do you owe money or think that you will?
Choose the year in which you apply the deduction
If you repay excess amounts received under the CRB before January 1, 2023, you can apply the deduction (the amount you repaid):
Example: It may be more advantageous to deduct $2,000 from your 2020 tax return rather than your 2021 tax return. The government provides details on the tax treatment of these benefits. But generally, choosing one year over the other based on your income could:
The CRB was available to all those who lost their jobs or part of their income due to the pandemic. This benefit helped millions of people breathe a little easier and get back on their feet. When you file your tax return, remember that the CRB is taxable and that if your income was above a certain threshold, you'll have to repay a portion of it. We’re here to answer your questions.
Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.
The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.
The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.
This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.
The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.
Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).