Some Canadians applied for emergency benefit through two government departments
More than 200,000 Canadians are being warned that they may have to repay government benefits if they were paid twice through the Canada Emergency Response Benefit (CERB) program.
The Canada Revenue Agency (CRA) has sent letters to 213,000 people who may have applied for the emergency benefit both through the CRA and Service Canada, according to the CBC.
However, the repayment won’t be required immediately.
Any individuals who mistakenly received multiple payments or payments they did not apply for can begin the repayment process below through the CRA website.
Back in September, an economist warned the transition from the CERB program to the employment insurance (EI) program would not be a smooth one.
The CERB is taxable so recipients will receive a T4A tax slip on the amount of CERB they receive.
“If you repay the CERB, the CRA won’t issue a T4A for that payment. To ensure that we don’t issue slips improperly, you need to repay your CERB before Dec. 31, 2020.”
Canada Recovery Benefit (CRB) income will also be reported on a T4A slip.
“CRA will withhold 10 per cent taxes from your CRB earnings and none from your CERB, but this does not cover the first federal and provincial tax bracket. It is recommended to save some money on the side in case you are required to pay taxes when you file your income tax return,” says Susan Watkin, accounting educator, business strategist and advisor at Turbo Tax Canada.
For the 2020 tax year, additional reporting requirements on the T4 slip, Statement of Remuneration Paid, will apply to all employers, and will help the CRA validate payments under the Canada Emergency Wage Subsidy (CEWS), the CERB and the Canada Emergency Student Benefit (CESB).
The federal government has provided a calculator for employers to help with CEWS calculations.
Last week, the government also formally approved the extension of the CEWS program until June 2021.