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Tips for Tax Season (Covid Edition)
March 24th, 2021 by Katie Weber
Tax time is always tricky, but add the unthinkable year that 2020 was to the mix, it becomes so much more complicated. The tax status around covid relief benefits like CERB, CESB, CRB, CEWS AND CEBA add to the complications. It can be overwhelming to figure out the changes this tax season, so we broke it down for you.
The emergency relief benefits are considered taxable; CERB and CESB didn’t withhold any taxes while the remaining emergency benefits withheld 10%. For individuals, official tax slips for income support and benefits received under the COVID-19 relief programs have been issued. Here is the summary of taxable and non-taxable Covid-19 support programs:
Taxable Covid Relief Benefits:
- Canada Emergency Response Benefit (CERB)
- Employment insurance (EI)
- Canada Recovery Benefit (CRB)
- Canada Recovery Sickness Benefit (CRSB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Emergency Student Benefit (CESB)
- One-time payment – disability support
- One-time payment – GST/HST credit
- One-time payment – Canada Child Benefit
- One-time payment – OAS/GIS
Interest relief will be given to those who meet all the eligibility criteria:
- Whose taxable income was 75,000 or less
- Who received one of the relief benefits
- Filed their 2020 tax return
- Have a balance owing
CRA will automatically apply for interest relief on your 2020 tax owing until April 30th, 2022, although late filing penalties still apply.
If you worked from home during 2020, 50% of the time over four consecutive weeks due to COVID-19, you will be able to claim the home office expense deduction.
A new temporary flat rate method will allow eligible employees to claim a deduction for each day they worked at home in that period, up to a maximum of $400. Under this new method, employees will not have to get their employer to sign forms T2200 or T2200s which are forms for an employee to deduct employment expenses from their income.
You can also use the standard detailed method. This involves calculating what percentage of your household costs, such as electricity, rent, the internet, can be applied to your home office. It is important to note that you are required to save all relevant receipts as proof.
If you owe taxes to CRA and are overwhelmed with paying it back, contact us at Doyle Salewski, ask us your questions, or book your free consultation today. Our Debt Relief Specialists are available by phone at 613-237-5555. There is no need to travel to a local office as we are offering video appointments, with all services available from the comfort of your home.