The Government of Canada has announced that some self-employed Canadians who were ineligible to receive the Canada Emergency Response Benefit (CERB), and received it anyway, will not be forced to repay the money.
In a statement released in February, the federal government said that self-employed Canadians who applied for, and received CERB payments based on their gross income instead of their net income would not be required to repay the benefit on their 2020 tax year return - as long they also met all other eligibility criteria.
This means that self-employed individuals whose net self-employment income was less than $5,000 and who applied for the CERB will not be required to repay the benefit, as long as their gross self-employment income was at least $5,000 and they met all other eligibility criteria.
For those who may have already voluntarily repaid the CERB, the Canada Revenue Agency (CRA) and Service Canada will return any repaid amounts to these individuals.
Commenting on the announcement, Carla Qualtrough, the Minister of Employment, Workforce Development and Disability Inclusion, said: “We made the CERB's eligibility criteria as broad and inclusive as possible so that workers who needed support could get it. This announcement is giving certainty to self-employed Canadians who applied for the CERB in good faith, while also protecting their financial well-being.
“We have gone to great lengths to support workers during this pandemic, and will continue to do so as we build back better together."
In addition to this announcement, the Government of Canada also announced that it will provide targeted interest relief to Canadians who received COVID-related income support benefits.
Once individuals have filed their 2020 income tax and benefit return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022. This will give Canadians more time and flexibility to pay if they have an amount owing.
To qualify for targeted interest relief, individuals must have had a total taxable income of $75,000 or less in 2020 and have received income support in 2020 through one or more of the following COVID-19 measures:
- the Canada Emergency Response Benefit (CERB);
- the Canada Emergency Student Benefit (CESB);
- the Canada Recovery Benefit (CRB);
- the Canada Recovery Caregiving Benefit (CRCB);
- the Canada Recovery Sickness Benefit (CRSB);
- Employment Insurance benefits; or
- similar provincial emergency benefits.
The Canada Revenue Agency (CRA) will automatically apply the interest relief measure for individuals who meet these criteria. Additionally, any CRA-administered credits and benefits normally paid monthly or quarterly, such as the Canada Child Benefit and the goods and services tax/harmonized sales tax credit will not be applied to reduce individuals’ tax debt owing for the 2020 tax year.
If you have any questions about self-employment tax returns for the 2020 tax year, which must be submitted by April 30, 2021, then contact Koroll & Company today. Our team of chartered professional accountants would be happy to help.
