COVID-19 turned just about everything upside down. So many measures had to be implemented to support Canadians. There is inevitably a lot of confusion regarding tax protocols this year and the lack of access to services because of lockdowns has made this tax season even more difficult for everyone.
Payments from COVID-19 relief programs have many people scratching their heads in terms of what to report on their taxes. Here is a short list of programs that must be reported as taxable income:
- Canada emergency response benefit (CERB)
- Canada emergency student benefit (CESB)
- Canada recovery benefit (CRB)
- Canada recovery caregiving benefit (CRCB)
- Canada recovery sickness benefit (CRSB)
- Employment Insurance benefits
- Similar provincial emergency benefits
If your taxable income in 2020 was $75,000.00 or less and you also received one or more of the COVID-19 benefits listed above, you won’t have to pay any interest on the taxes that you owe until April 30, 2022.
Here is a video, posted by the CBC, highlighting what an average Canadian can expect to face this upcoming tax season.
Missed the 2020 Income Tax Deadline?
Though many people speculated that the 2020 Canadian income tax deadline for individuals would be extended, it remained April 30, 2021.
If you missed the 2020 income tax deadline, it’s important to get your taxes filed as soon as possible. If this is your first time filing late, you will be subject to a 5% penalty on the amount of tax debt you owe. There is also a 1% penalty for each full month that passes, up to 1 year, until you file. If you filed late in 2017, 2018 or 2019, that penalty maybe 10%. In this case, the monthly penalty is 2% per month for up to 20 months.
If you owe taxes or missed the tax deadline and know that you will owe taxes, being proactive is the best way to manage the challenge. At Doug Loiselle and Associates, we can help you through your financial challenges and connect you to a tax expert to get your taxes filed. For more information, visit www.dldebthelp.ca or call us at 1-877-732-5457.