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Nearly two million Canadians lost their jobs in 2020, many because of closures due to COVID-19. Dealing with the loss of work can be stressful, and your tax obligations might be last thing on your mind. We’re here to help you get through this year’s changes with 5 things you should know if you were suddenly unemployed.

1. It’s important to file your return.

If you only have a small amount of income to report this year (or even none at all), you should still file a return. Every Canadian resident is entitled to claim the basic personal amount, a tax credit which reduces the amount of tax you owe. The maximum basic personal amount you can claim for 2020 is $13,229. This means if you’re reporting less than $13,229 in income, you won’t owe federal taxes this year! You can also claim a corresponding provincial basic personal amount – the amount you’ll receive for this tax credit depends on which province or territory you live in.

The government also needs the information from your return to confirm your eligibility for federal benefits like the Canada Child Benefit (CCB) and the GST/HST Credit, as well as provincial benefits like the BC Recovery Benefit. If you don’t file a return, you’ll miss out on these benefits.

2. Many COVID-19 emergency benefits count as taxable income.

Many Canadians relied on financial support from the Canada Emergency Response Benefit (CERB) and other COVID-19 emergency benefits when they were faced with sudden unemployment in 2020.

Some federal emergency benefits, like CERB and the Canada Emergency Student Benefit (CESB), are included in your income for 2020, meaning your total income might be higher (or lower) than last year. This means you could find yourself in a different tax bracket and you could have to pay more (or less) tax this year than you did last year.

The good news is if you received federal and/or provincial COVID-19 emergency benefits and your net income is less than $75,000, the CRA and Revenu Québec won’t charge interest on the tax you owe from your 2020 return until April 30, 2022.

3. You might have to pay tax on your Employment Insurance (EI) benefits.

If you lost your job through no fault of your own (meaning you didn’t quit), you might have applied for Employment Insurance (EI) benefits as temporary financial support while you’re in between jobs.

Many Canadians also received EI benefits once their CERB payments ended. To make it easier for more Canadians to access their benefits, the federal government made temporary changes to the EI program which are in effect until September 25, 2021.

EI benefits are taxable. But don’t worry – you’ll receive a T4E slip, or a T4E(Q) slip if you’re a resident of Québec, showing the employment insurance you received or repaid this year, and that will help you figure out how much tax you owe.

Keep in mind, EI benefits are also subject to a clawback, meaning that if your net income is more than $67,750, you’ll need to repay a portion of your EI benefits to the CRA. This only applies to regular benefits (including fishing benefits). If you received special benefits, these won’t count towards your total income and you won’t need to repay any of the amounts you were given. Special EI benefits include:

• Maternity and parental benefits;
• Sickness benefits; and
• Family caregiver benefits (for children and adults).

4. You can still claim the cost of your childcare expenses.

Normally, you can’t claim childcare expenses unless you paid them in order to work or go to school. This means that you can’t usually claim these costs when you’re unemployed.

However, as a temporary measure for 2020 and 2021 returns only, this requirement is waived if you received EI benefits or COVID-19 relief benefits. This means that if you were unemployed but received EI benefits or COVID-19 relief benefits, you can claim your childcare expenses on your 2020 and 2021 returns. Since your EI benefits and/or COVID-19 relief benefits are also considered earned income, the amount you received will determine how much you can claim for your childcare expenses.

You’ll claim your childcare expenses on the T778 form, or if you’re a resident of Québec, on Schedule C.

5. You’ll need to decide when to receive your pension.

If you were the benefit of a Registered Pension Plan (RPP) when you lost your job, you can choose when to start receiving your benefits:

• You can wait until you’re the regular retirement age (usually 65 years old);
• You can transfer the value of your plan to a Locked-in Retirement Plan (LIRA), an investment account for your pension funds, but you can only use these amounts once you’re retirement age (keep in mind, if the amount you contribute to your LIRA is over your RRSP deduction limit, the excess amount will be reported as income in box 18 of your T4A slip); or
• If you find a new job, you might be able to transfer your benefits to the pension plan offered by your new employer.

You might have also received a lump-sum payment from your previous employer as severance pay, compensation for loss of employment, and/or unused sick leave. These amounts are usually taxable as a retirement allowance. This means you’ll owe the following percentage in taxes on your payment:

• 10% if you received less than $5000;
• 20% if you received between $5001 and $15,000; or
• 30% if you received more than $15,000.

If you received a retirement allowance, you’ll find this amount in box 66 of your T4 slip.

What’s my deadline?

Here’s how your tax situation might affect your deadline to file your return or pay your taxes owing:

Tax situation	Filing deadline	Deadline to pay taxes
I’m filing a federal return.	April 30, 2021	April 30, 2021
I’m filing a federal return and I received Employment Insurance (EI) benefits or COVID-19 emergency benefits in 2020.	April 30, 2021	April 30, 2022*
I’m self-employed.	June 15, 2021	April 30, 2021
I’m self employed and I received EI benefits or COVID-19 emergency benefits in 2020.	June 15, 2021	April 30, 2022*
My spouse is self-employed.	June 15, 2021	April 30, 2021
I’m a Québec resident.	April 30, 2021	May 31, 2021
I’m a Québec resident and I received EI benefits or COVID-19 emergency benefits in 2020.	April 30, 2021	April 30, 2022*
I’m self-employed and a Québec resident.	June 15, 2021	May 31, 2021
I’m self-employed and a Québec resident, and I received EI benefits or COVID-19 emergency benefits in 2020.	June 15, 2021	April 30, 2022*
I moved away from Canada.	April 30, 2021	April 30, 2021
I moved away from Canada and I received Canadian COVID-19 emergency benefits or EI benefits in 2020.	April 30, 2021	April 30, 2022*

* As long as your taxable income is less than $75,000.

When do I have to pay my taxes owing?

If you owe the federal government money this year, the deadline to pay your balance is April 30, 2021. Beginning on May 1, the Canada Revenue Agency (CRA) will start adding interest to any amount you owe.

If you’re a Québec resident who owes the provincial government money this year, the deadline to pay your balance this year is May 31, 2021. This means Revenu Québec will not add interest to the amount you owe until June 1, 2021.

If you received Employment Insurance (EI) benefits or COVID-19 emergency benefits in 2020 and your taxable income was less than $75,000, you won’t have to pay the taxes you owe until April 30, 2022. Keep in mind, you still need to file your return by April 30, 2021 to avoid late-filing penalties.

Why should I file on time?

Between avoiding late-filing penalties and getting your refund sooner, there are plenty of reasons why you shouldn’t file your return late. Check out this blog to learn more about why you should try to file on time.

I’m a resident of Québec, what’s my deadline?

Québec returns are due by the same deadline as federal returns: April 30 (or if you’re self-employed, on June 15). However, Revenu Québec will allow 2020 returns to be filed up until May 31 without late-filing penalties or interest added to unpaid taxes owing.

It’s generally recommended that you file your returns with Revenu Québec and the CRA at the same time.

I’m self-employed, what’s my deadline?

If you’re self-employed (for example, if you’re a freelancer or a small business owner), your deadline to file is June 15, 2021. If you and your spouse or common-law partner are preparing your returns together and only one of you is self-employed, you can still file both returns by June 15, 2021.

Keep in mind that if you owe federal taxes, your payment is still due on April 30, 2021, and if you owe Québec taxes, your payment is still due on May 31, 2021.

I moved away from Canada, what’s my deadline?

If you were a Canadian resident in 2020, your deadline to file is April 30 (or June 15, if you were self-employed) – even if you moved away.

If you’re filing by mail, remember to take into consideration how long it might take your return to get to Canada. Depending on where you live now, this could be anywhere between a few days to a few weeks.

If you moved before December 31, 2020, you might also have to file a return in the country where you now live. Visit your country’s government website or find a local tax professional to learn about the local tax laws.

Will there be an extension to file my return again this year?

Revenu Québec will allow 2020 returns to be filed up until May 31, 2021 without late-filing penalties or interest added to unpaid taxes owing. If you’re self-employed, your deadline to file is still June 15, 2021.

There are currently no plans for the CRA to extend the federal filing deadline again. However, if this changes, you’ll find out here! Sign up for our newsletter to get reminders about key tax dates delivered straight to your inbox or keep checking the H&R Block Tax Tips Blog for the latest news from the CRA and Revenue Québec.

It’s never too late to get help.

With nearly 60 years of experience preparing and filing all sorts of Canadian taxes, H&R Block has tax solutions that will fit your needs and gives you access to the largest network of reliable Tax Experts.

Although our offices are busier in April than in January, H&R Block Tax Experts are here for you all year round – whether it’s your first time filing, if you need to catch up on returns from previous years, or anything else tax season sends your way. We can even review up to three of your past returns looking for money that others may have missed through our Free Second Look service. By filing with H&R Block, you can be sure you’ll get the most out of your return, with our Maximum Refund Guarantee^TM.