The Canada Revenue Agency says some taxpayers who repaid COVID-19 related benefits in 2020 are getting incorrect tax slips. THE CANADIAN PRESS/Justin Tang

The Canada Revenue Agency says some taxpayers who repaid COVID-19 related benefits in 2020 are getting incorrect tax slips. THE CANADIAN PRESS/Justin Tang

CRA says ‘rare’ error in some tax slips lists repaid CERB as taxable income

‘These repayments can be properly and easily credited to the correct account,’ assures CRA spokesperson

When the COVID-19 pandemic closed schools last spring, crosswalk guard and recent graduate Danny Thomson was encouraged by the Ottawa Safety Council to apply for the new COVID-19 emergency benefits.

But after returning $3,000 in Canada Emergency Response Benefits last year after realizing he was ineligible, he was told by the Canada Revenue Agency that $2,000 has not been repaid and is being considered taxable income for 2020.

The Canada Revenue Agency confirmed this week that some taxpayers who repaid COVID-19 related benefits in 2020 have received incorrect tax slips that wrongly list portions of the repaid benefits as taxable income.

The CRA had previously informed CERB recipients that they must repay the benefit if they earned more income than expected during the four-week payment period, or if they applied and later realized they were ineligible. It also said duplicate CERB payments should be repaid — if recipients applied for and got the CERB from both the CRA and Employment Insurance or Service Canada for the same eligibility period.

CERB recipients who repaid before Dec. 31, 2020, should not have to pay tax on those amounts on 2020 tax returns, the revenue agency’s website notes, with the repaid amounts subtracted from the individual’s benefit amount on T4A slips.

But the tax agency said there is a rare error in which the repayments are credited to a taxpayer’s T1 instalment account instead of their emergency benefits account.

“These repayments can be properly and easily credited to the correct account,” CRA spokesperson Etienne Biram said in a statement.

The CRA said taxpayers should call 1-800-959-8281 to fix incorrect tax slips. It added that it is being proactive and moving the payments to the correct accounts, and that amended tax slips will be issued.

Thomson said three calls to the CRA so far have been unsuccessful as all the agents have been busy each time he called.

Edward Rajaratnam, executive director at EY Canada’s people advisory services, said a phone call to the CRA — preferably in the morning before a queue starts forming on the hotline — is still a better route than a letter, since the error might be difficult to dispute in an online portal.

“My first rule of thumb is, please reach out to the CRA — because if it was a genuine error, they would correct it,” Rajaratnam said.

“(A phone call is ) more personal in nature. Everybody’s situation is different.”

Rajaratnam said he has seen the tax slip issues cropping up across his network, from friends to LinkedIn connections. The first question, he said, is whether the repayment of the emergency benefit was made before Dec. 31. If a taxpayer repaid the benefits in January or February, they’ll have to wait until this time next year to get the adjustment in their 2021 tax filing.

Before filing a complaint, Rajaratnam said it’s also worth checking with your bank to ensure the repayment left your account and the relevant agency received it.

He suggested anyone who repaid benefits before the new year check for errors as soon as the T-slip arrives, rather than leaving it until closer to the tax-filing deadline to catch a miscalculation. That way, Rajaratnam said, there will be time to get a corrected tax slip.

“I wouldn’t suggest anybody to file your tax return without having that (amended T4A slip),” Rajaratnam said.

Rajaratnam said that he’s hopeful the CRA will provide detailed guidance on this issue before the end of April, so people know when to expect their corrected tax slips.

If for some reason, someone notices the error right before the tax-filing deadline and cannot get through to the CRA, Rajaratnam said there is a last resort: Putting the correct amount on the tax filing and including a letter to the CRA explaining why the T4A doesn’t match the tax filing.

But Rajaratnam stressed that it is best not to wait, since the CRA has not yet said if it will offer extensions to deal with these issues.

“This has been a very fluid situation with all their the wage subsidies and CERB benefits,” Rajaratnam said. “I think the CRA is, similar to all other governments, trying to do the best they can.”

The CRA could also be clearer in its instructions and on its website, Thomson says, noting that Reddit message boards on CERB and Employment Insurance are filled with similar anecdotes.

“I know I’m not the only one who’s had this issue, and it’s scary getting a big government letter in the mail,” Thomson said.

“I don’t think I should have to pay taxes on this. Hopefully I can get through to someone to get this fixed.”

This report by The Canadian Press was first published March 2, 2021.

taxes

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Danita Bilozaze and her daughter Dani in Comox. Photo by Karen McKinnon
Making a name for herself: Valley woman reclaiming her Indigenous name

First in Canada to be issued new passport under the TRC Calls to Action

For Leela Harrop, the recent death of her brother Raju Tiwari pushed her to sign up for the vaccine. Photo supplied
Comox woman on fence about vaccine prompted by brother’s death

Leela Harrop says she did have issues with signing up online this past week

Most categories of crime held steady from year to year in Cumberland. File photo
Cumberland crime numbers hold steady year to year

A few categories had notable changes but many were similar to 2019

The colourful Taylor’s Checkerspot butterfly has been reintroduced on Hornby Island, BC. Photo courtesy the Taylor’s Checkerspot Butterfly Recovery Project.
Checkerspot Butterfly Recovery Project releases more caterpillars on Hornby Island

Chris Junck Special to Black Press The number of Taylor’s checkerspot butterflies… Continue reading

Paper Excellence took over Catalyst Paper operations in B.C. in 2018. (Paper Excellence photo)
Rainbow trouts thrashing with life as they’re about to be transferred to the largest lake of their lives, even though it’s pretty small. These rainbows have a blue tinge because they matched the blue of their hatchery pen, but soon they’ll take on the green-browns of their new home at Lookout Lake. (Zoe Ducklow/News Staff)
VIDEO: B.C. lake stocked with hatchery trout to delight of a seniors fishing club

The Cherish Trout Scouts made plans to come back fishing soon

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The following is a list of restaurants offering take-out and patio dining. ADOBE STOCK IMAGE
List of Comox Valley restaurants offering take-out, patio dining options

Restaurants in the Comox Valley continue to adapt to government-imposed restrictions in… Continue reading

Photos of Vancouver Canucks players are pictured outside the closed box office of Rogers Arena in downtown Vancouver Thursday, April 8, 2021. THE CANADIAN PRESS/Jonathan Hayward
Canucks games against Leafs postponed as team returns from COVID-19

The team has had 11 games postponed since an outbreak late last month

Royal Inland Hospital in Kamloops. (Dave Eagles/Kamloops This Week file photo)
RCMP intercept vehicle fleeing with infant taken from Kamloops hospital

The baby was at the hospital receiving life-saving care

Vancouver Police Const. Deepak Sood is under review by the Independent Investigations Office of B.C. after making comments to a harm reduction advocate Sunday, April 11. (Screen grab)
VIDEO: Vancouver officer convicted of uttering threats under watchdog review again

Const. Deepak Sood was recorded Sunday saying ‘I’ll smack you’ and ‘go back to selling drugs’ to a harm reduction advocate

Provincial health officer Dr. Bonnie Henry prepares a daily update on the coronavirus pandemic, April 21, 2020. (B.C. Government)
B.C.’s COVID-19 infection rate persists, 1,005 new cases Friday

Hospitalization up to 425, six more virus-related deaths

Premier John Horgan receives a dose of the AstraZeneca COVID-19 vaccine at the pharmacy in James Bay Thrifty’s Foods in Victoria, B.C., on Friday, April 16, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. Premier John Horgan gets AstraZeneca shot, encourages others

27% of residents in B.C. have now been vaccinated against COVID-19

The Nautical Dog Cafe at Skaha marina is getting its patio ready in hopes Mother Nature will provide where provincial restrictions have taken away indoor dining. (Facebook)
‘A lot of instability’: B.C. restaurants in layoff limbo

As COVID-19 cases stay high, restaurants in British Columbia are closed to indoor dining

Most Read