MOST CANADIANS WHO RECEIVED EI OR ONE OF THE MANY COVID-19 FINANCIAL AID BENEFITS LAST YEAR WILL HAVE ONE FULL YEAR TO REPAY ANY 2020 TAX DEBTS INTEREST-FREE, NATIONAL POST HAS LEARNED.
Trudeau set to announce new relief Tuesday
Most Canadians who received Employment Insurance or one of the federal government's many COVID-19 financial aid benefits last year will have one full year to repay any 2020 tax debts interest-free, National Post has learned.
The Trudeau government is set to announce the new relief measures Tuesday, sources confirmed to National Post. The sources were granted anonymity because they were not authorized to discuss this matter publicly.
To be eligible for the interest relief, individuals must have made a maximum of $75,000 in taxable income in 2020 and received one or more of the government's five COVID-19 financial aid measures (or any equivalent provincial emergency benefit).
Those are the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Caregiving Benefit (CRCB) and Canada Recovery Sickness Benefit (CRSB).
Taxpayers who were on EI for one or more periods throughout 2020 — regardless of whether the job loss was caused by the pandemic or not — will also be eligible for the interest relief.
The new measure will only affect tax debts contracted in 2020, and will have no impact on outstanding amounts owing from previous years.
Another novelty for the 2020 tax season: the Canada Revenue Agency won't claw back monthly or quarterly credits and benefits (such as
GST/HST credits or the Canada Child Benefit) to pay for tax debts owed by COVID-19 relief program recipients, the sources confirmed.
Normally, if a taxpayer has an outstanding debt with the CRA and is eligible to receive one or many of those credits and benefits, the agency would withhold those payments and apply them against the amount owing until the entire debt is settled.
But Canadians who qualify for the COVID-19 interest relief program will still receive the full amount of credits and benefits they're eligible for, regardless of if they have any outstanding tax debts for the 2020 tax year.
Sources were not able to say how many Canadians would be impacted by this new program. As of now, there have been 8.9 million CERB applicants, 1.66 million CRB applicants, 708,000 CESB applicants, 368,830 CRSB applicants and 321,350 CRCB applicants.
The announcement comes as a growing chorus of Canadians who received government aid during the pandemic are expressing concern about the possibility of having to repay some or all of it as the 2020 tax season begins shortly. For example, some people who “double-dipped” CERB payments will have to reimburse at least one of the duplicate payments they received.
The government's recouping efforts begin during a time when many businesses have ground to a near-complete halt as many provinces impose strict lockdowns to curb the second wave of COVID-19 washing across the country.
In December, the CRA created a stir when over 440,000 Canadians received an “educational letter” informing them they may need to repay some or all COVID-19 aid payments if they could not prove their eligibility come the 2020 tax season.