Potential CERB Repayment
As with any brand-new government programs, eligibility criteria are often difficult to decipher – especially when they are changing from day to day as with the 2020 COVID programs. This may lead to some situations where individuals may have received benefits when they should not have.
CRA will be comparing the payroll records of employers with the information of CERB claimants.
They will be sending out letters to verify many of the recipient’s eligibility.
To shed some light on potential repayments required, here are some situations to watch for:
- $5,000 income eligibility requirement: did you have $5,000 of eligible income in 2019, or in the 12-month period prior to the date of application? Eligible income includes employment or gross self-employment income.
- Other income thresholds: did you earn more income than expected during the time you received CERB? You could not earn more than $1,000 in employment or self-employment income within the four-week benefit period of your claim.
- Receiving CERB from both Employment Insurance and Service Canada: did you receive benefits for the same period from two sources?
It will typically take 2-3 weeks to process the eligibility review for CRA once they have received a complete response to a request for information. If your application is denied, you may request a second review (which will be completed by a different CRA official). This request must include the reasons why you disagree with the decision and provide any new relevant facts or documents as may be applicable.
How to return or repay CERB
Depending on which program you received benefits from, repayments may need to go to Service Canada, or to CRA.
How CERB repayments affect your income tax returns
If you repaid CERB:
- Before December 31, 2020 – it should have been reflected already on the T4A slip you received, reducing the taxable amount for 2020 (Note: make sure to double-check and ensure your T4A slip only reflects what you received LESS any repayments – some errors have occurred in these slips)
- After December 31, 2020 – the amounts received in 2020 will be taxable 2020. Repayments made in 2021 will trigger a T4A slip for 2021, which will provide for a deduction on your 2021 tax return.