Canada Emergency Response Benefit (CERB) is taxable, do have a payment pay-back plan ready?
Did you know that CERB (Canadian Emergency Response Benefit) payments are taxable?
Melanie Beaumont, CPA, CA, LPA recommends setting aside one-quarter of the benefit to cover the taxes but it is a challenge for many to do so.
Budgeting and careful planning during COVID-19 is an essential step to take in order to save the shock of taxes owed.
Try to save at least a portion of CERB payments for your tax repayment. This will help in softening the blow come 2021 tax time.
Related Read: Confused by tax deadlines? Here is a list of changed dates due to COVID-19
Need the latest update on CERB? Here is some useful information.
What is the Canada Emergency Response Benefit?
The Canada Emergency Response Benefit provides temporary income support to workers who have stopped working related to COVID-19.
Individuals who are eligible for Employment Insurance regular or sickness benefits, or who have recently exhausted Employment Insurance regular or fishing benefits may also be eligible.
The new Canada Emergency Response Benefit provides $500 per week for a maximum of 24 weeks.
The Benefit is available from March 15, 2020, to October 3, 2020. You can apply no later than December 2, 2020 for payments retroactive to within that period.
Why is the Canada Emergency Response Benefit being extended?
The Canada Emergency Response Benefit was put in place by the Government of Canada to ensure Canadians had timely and efficient support when they needed it most for reasons related to COVID-19. The Government of Canada’s priority continues to be to ensure that Canadians can access the support they need.
While we are seeing positive progress in the number of people returning to the workforce, many Canadians continue to face challenges getting back to work. As well, the restart of the economy is uneven across the country and sectors. Many Canadians may still be out of work and still need temporary income support.
Therefore, the Government of Canada is extending the CERB by 8 weeks to a maximum of 24 weeks, at the current benefit rate of $500/week to ensure workers continue to get much-needed support as they transition back to work.
What was the maximum number of weeks of CERB benefits prior to the extension?
Prior to the extension, a maximum of 16 weeks of temporary income support was available to workers who have stopped working for reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits or Employment Insurance fishing benefits between December 29, 2019 and October 3, 2020.
The maximum number of weeks of benefit is being extended by eight weeks, for a total maximum of 24 weeks.
The Benefit is available from March 15, 2020, to October 3, 2020. Applicants can apply no later than December 2, 2020, for payments retroactive to within that period.
If I have reached my maximum of 16 weeks how do I apply for the extension?
You would continue to apply as you have for the previous 16 weeks of benefits, either through CRA if you are not EI eligible or through Service Canada if you are EI eligible.
If you are receiving the CERB through Service Canada, you have to submit your internet report every 2 weeks if your situation continues.
In these tough times, I am still working at the office to prepare your income tax returns so that you can get your money back!
My office is open and ready to serve you.
Hours are Monday to Thursday 9:00 am-5:00 pm daily. I am excited to be reopened and look forward to meeting with clients in person. I am following recommended Covid-19 safety protocols and masks are required to enter the office and I ask that each person sanitize their hands on entry.
Phone: 905-875-4444 Email: melanie@miltonaccountant.com
I am accepting personal and corporate tax information in one of four ways:
- In-office – please see details above to drop off tax returns in-person;
- Via email – you can scan your documents and then send them to me in an email (preferably send everything in one email);
- Via a portal – I have a secure portal that I can invite you to. We can then share documents between us. This requires that you send me an email requesting the portal. I will then send you an invite to which you then accept and set up with your own password. We can then upload documents and receive notices whenever something changes.
- Mailbox drop-off – there is a mailbox at the back of the building to submit your documents in. It is a locked box that I check a few times a day.
When the tax return(s) are completed, I will be in touch with respect to delivery and pick up options.
Take care and stay safe. If we all work together, this will be over faster!
I provide a wide range of professional accounting, income tax preparation and consulting services including:
• Financial statement preparation
• Accounting and bookkeeping
• Personal Income tax preparation
• Estate returns
• Corporate Income tax preparation
• CRA audits and assistance
• HST and sales tax
• Business succession and valuations
• Business Start-ups
Let’s get started in three easy steps:
- Learn more about me ⇨ Send me a LinkedIn connection invite
- Send me an e-mail ✉ : Send me a message at melanie@miltonaccountant.com
- Call ✆: Give me a call locally at 905-875-4444
Get more advice from Melanie on her blog and connect with her on Facebook and Twitter as well!
Leave a Reply
Want to join the discussion?Feel free to contribute!