How COVID-19 benefits might affect your taxes this year.

Tax interest relief

The Canada Revenue Agency (CRA) and Revenu Québec won’t charge interest on the taxes you owe from your 2020 return until April 30, 2022.

You’re eligible for this interest relief if your taxable income is less than $75,000 and you received any of the following emergency benefits in 2020:

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 (EI) benefits
Incentive Program to Retain Essential Workers (IPREW)
Similar provincial emergency benefits

You’ll still need to file your return by April 30, 2021 to avoid late filing penalties.

Federal COVID-19 relief measures

Tax-free COVID-19 relief measures

Some of the federal emergency benefits for individuals and families were tax-free. You won’t be taxed on the following amounts:

An extra Canada Child Benefit (CCB) payment
An extra payment because of a disability
An extra payment of the GST/HST credit
An extra payment of the Old Age Security (OAS) pension

Canada Emergency Response Benefit (CERB)

What’s this?

CERB provided temporary income support to employed and self-employed Canadians who lost their income due to COVID-19. This includes employed, self-employed, wage earners, and contract workers. CERB provided a payment of $2,000 per month for 7 months.

How will it affect my taxes?

You’ll need to pay tax on your CERB payments when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

If you received your CERB payments from the CRA, you’ll find this amount in box 197 of your T4A slip. If you received your CERB payments from Service Canada, this amount will be included with your regular Employment Insurance (EI) benefits in box 14 on your T4E slip. If you’re a resident of Québec, you’ll find this amount in box O of your RL-1 slip. You’ll need to report these amounts when you prepare and file your return.

If you received CERB payments but later found out you weren’t eligible for the benefit, you’ll need to return or repay the amount you were given. If you repaid your CERB amounts before December 31, 2020, you won’t need to pay tax on them when you file your return.

In February 2021, the Government of Canada announced that fewer self-employed Canadians need to repay the CERB amounts they received. Check out this blog on what you need to know about repaying COVID-19 benefits to learn more.

Temporary changes to the Employment Insurance (EI) program

What’s this?

Many Canadians 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.

How will it affect my taxes?

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.

Canada Emergency Student Benefit (CESB)

What’s this?

The CESB provided temporary income support to post-secondary students and recent graduates who couldn’t find work due to COVID-19. The CESB provided $1,250 per month for 4 months. Students who had a disability or dependants could also get an extra $750 per month.

How will it affect my taxes?

You’ll need to pay tax on your CESB payments when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 198/199 of your T4A slip. If you’re a resident of Québec, you’ll find this amount in box O of your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

If you received CESB payments but later found out you weren’t eligible for the benefit, you’ll need to return or repay the amount you were given. If you repaid your CESB amounts before December 31, 2020, you won’t need to pay tax on them when you file your return. Check out this blog on what you need to know about repaying COVID-19 benefits to learn more.

Canada Recovery Benefit (CRB)

What’s this?

The CRB provides income support to employed or self-employed Canadians who don’t qualify for Employment Insurance (EI) benefits. The CRB provides $1,000 every 2 weeks, for up to 38 weeks. This benefit is still open for applications.

How will it affect my taxes?

This benefit is subject to 10% tax withholding. This means 10% was sent to the CRA before you received it, which reduces the amount of taxes you owe.

The CRB is also subject to a clawback, meaning that if your net income is more than $38,000, you’ll need to repay a portion of your benefit to the CRA.

You’ll find this amount in box 202 of your T4A slip. If you’re a resident of Québec, you’ll find this amount in box O of your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

Canada Recovery Sickness Benefit (CRSB)

What’s this?

The CRSB provides income support to employed or self-employed Canadians who can’t work because they’re sick or need to self-isolate, or because they have an underlying health condition that puts them at greater risk of getting COVID-19. The CRSB provides $500 per week, for up to 4 weeks. This benefit is still open for applications.

How will it affect my taxes?

This benefit is subject to 10% tax withholding. This means 10% was sent to the CRA before you received it, which reduces the amount of taxes you owe.

You’ll find this amount in box 203 of your T4A slip. If you’re a resident of Québec, you’ll find this amount in box O of your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

Canada Recovery Caregiving Benefit (CRCB)

What’s this?

The CRCB provides income support to employed or self-employed Canadians who can’t work because they need to care for a family member, including family members who need supervision if they’re under the age of 12 and their school is closed, or because they’re sick and need to self-isolate due to COVID-19. The CRCB provides $500 per week for up to 38 weeks. This benefit is still open for applications.

How will it affect my taxes?

This benefit is subject to 10% tax withholding. This means 10% was sent to the CRA before you received it, which reduces the amount of taxes you owe.

You’ll find this amount in box 204 of your T4A slip. If you’re a resident of Québec, you’ll find this amount in box O of your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

Alberta COVID-19 relief measures

Emergency Isolation Support

What’s this?

This relief measure provided income support to employed and self-employed Albertans who couldn’t work because they needed to self-isolate, or because they needed to care for a dependant who was self-isolating. Eligible workers received a one-time payment of $1,146.

How will it affect my taxes?

You’ll need to pay tax on the Emergency Isolation Support when you file your return. This support payment will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.

Working Parents Benefit

What’s this?

This is a one-time payment of $561 per child for families who paid for childcare so that they could continue working during the pandemic and whose annual household income is less than $100,000. Applications are open on the provincial government website until March 31, 2021. Keep in mind, if you incurred your childcare expenses while collecting CERB or EI benefits, you won’t be eligible for this benefit.

How will it affect my taxes?

This benefit is tax-free, but the amount you receive for the Working Parents Benefit will lower the amount you can claim for childcare expenses on your 2020 return. If you’ve already filed your 2020 return but want to apply for this benefit, you’ll need to request a change to your return.

Critical Workers Benefit

What’s this?

This is a one-time payment of $1,200 for eligible frontline workers. If you work in public healthcare, social services, or education, you’ll receive this benefit automatically. If you work in the private sector or in a First Nations community, your employer has to apply for this benefit on your behalf. Applications are open on the provincial government website until March 19, 2021.

How will it affect my taxes?

These support payments will be subject to payroll deductions (including tax and EI deductions) if you receive them. You’ll find this amount included with your regular salary on your T4 slip. You’ll need to report this amount when you prepare and file your return.

Keep in mind that these support payments will be included in your income for 2020, so they might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

British Columbia COVID-19 relief measures

Tax-free COVID-19 relief measures

Some of the emergency benefits for individuals and families offered in British Columbia were tax-free. You won’t be taxed on the following amounts:

B.C. Emergency Benefit for Workers
B.C. Recovery Benefit
An extra payment of the B.C. Low-Income Climate Action credit
A temporary increase of the B.C. Seniors Supplement

Temporary pandemic pay

What’s this?

Between March 15 and July 4, 2020, eligible frontline workers (such as nurses or other hospital staff) were paid an extra $4/hour for the straight-time and overtime hours they worked. This amount was paid as a lump sum.

How will it affect my taxes?

These support payments were subject to payroll deductions (including tax and EI deductions) when you received them. You’ll find this amount included with your regular salary on your T4 slip. You’ll need to report this amount when you prepare and file your return.

Manitoba COVID-19 relief measures

Tax-free COVID-19 relief measures

The Disability Economic Support Program was a tax-free benefit. If you received the one-time payment of $200 in June 2020, you won’t be taxed on this amount.

Manitoba Risk Recognition Program

What’s this?

Eligible frontline workers (such as staff at supermarkets or gas stations) who worked at least 200 hours between March 20, 2020 and May 29, 2020 received a one-time payment of $1,515 before taxes.

How will it affect my taxes?

This benefit was subject to 10% tax withholding. This means 10% was sent to the CRA before you received it, which reduces the amount of taxes you owe.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.

New Brunswick COVID-19 relief measures

New Brunswick Workers Emergency Income Benefit

What’s this?

Eligible workers received a one-time payment of $900 as temporary income support between the time they lost their job or closed their business after March 15, 2020 and the time CERB payments started.

How will it affect my taxes?

You’ll need to pay tax on this benefit when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.

Newfoundland and Labrador COVID-19 relief measures

There were no provincial relief measures offered to individuals and families in Newfoundland and Labrador.

Nova Scotia COVID-19 relief measures

Provincial relief measures offered to individuals and families in Nova Scotia will not affect tax returns.

Ontario COVID-19 relief measures

Tax-free COVID-19 relief measures

Some of the emergency benefits offered to individuals and families in Ontario were tax-free. You won’t be taxed on the following amounts:

Support for Families program
Support for Learners program

Temporary pandemic pay

What’s this?

Between April 4 and August 13, 2020, eligible frontline workers (such as nurses or other hospital staff) were paid an extra $4/hour by their employer. This amount could have been paid as a lump sum or added to their hourly wages.

How will it affect my taxes?

Prince Edward Island COVID-19 relief measures

Tax-free COVID-19 relief measures

Some of the emergency benefits offered to individuals and families in Prince Edward Island were tax-free. You won’t be taxed on the following amounts:

Temporary Rental Assistance Benefit
Employee Gift Card Program

COVID-19 Income Support Program

What’s this?

The COVID-19 Income Support Program provided up to $750 for workers who were laid off due to COVID-19, $250/week for workers who kept their jobs but with reduced hours, and up to $500/week for self-employed workers.

How will it affect my taxes?

You’ll need to pay tax on any support payments you received when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.

COVID-19 Support for Essential Workers

What’s this?

Eligible essential workers who earned less than $3,000/month (or $18.75/hour) could receive a one-time payment of $1,000. Their employer needed to apply for this benefit on their behalf.

How will it affect my taxes?

This support payment was subject to payroll deductions (including tax and EI deductions) when you received it. You’ll find this amount included with your regular salary on your T4 slip. You’ll need to report this amount when you prepare and file your return.

Québec COVID-19 relief measures

Incentive Program to Retain Essential Workers (IPREW)

What’s this?

This program provided temporary income support to essential workers in Québec. If you qualified, you earned $100 per week for up to 16 weeks in addition to your regular wages.

How will it affect my taxes?

You’ll need to pay tax on any IPREW payments you received when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find the amount you need to report in box O-5 on your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

Farm Worker Bonus

What’s this?

This program provided temporary income support to farmers in Québec. If you qualified, you earned $100 per week for up to 16 weeks in addition to your regular wages.

How will it affect my taxes?

You’ll need to pay tax on any Farm Worker Bonus payments you received when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box O-5 on your RL-1 slip. You’ll need to report this amount when you prepare and file your return.

Saskatchewan COVID-19 relief measures

Self-Isolation Support Program

What’s this?

This emergency benefit provided temporary income support to employed or self-employed individuals in Saskatchewan who couldn’t work because they needed to self-isolate due to COVID-19. Eligible workers received $450/week for a maximum of 2 weeks.

How will it affect my taxes?

You’ll need to pay tax on the support payments you received when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.

Temporary Wage Supplement

What’s this?

Between March 15 and July 4, 2020, eligible home care workers (such as attendant care workers, cooks, or janitors) received an extra $400/month if their regular wages were less than $24/hour. Between November 19, 2020 and January 13, 2021, eligible home care workers received an extra $400/month, no matter what their regular wages were.

How will it affect my taxes?

You’ll need to pay tax on the Temporary Wage Supplement when you file your return. This benefit will be included in your income for 2020, so it might make your total income higher than last year. This means you could find yourself in a different tax bracket and you could have to pay more tax this year than you did last year.

You’ll find this amount in box 200 of your T4A slip. You’ll need to report this amount when you prepare and file your return.