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

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
110 new cases of COVID-19 in Interior Health

Provincial health officers announced 1,005 new cases throughout B.C.

Kristian Camero and Jessica Wood, seen here, co-own The Black Cauldron with Stephen Barton. The new Nelson restaurant opened earlier this month while indoor dining is restricted by the province. Photo: Tyler Harper
A restaurant opens in Nelson, and no one is allowed inside

The Black Cauldron opened while indoor dining is restricted in B.C.

These two city-owned houses on Railway Avenue in the Railtown district will be sold. Photo: Bill Metcalfe
City of Nelson will sell two derelict houses in Railtown

Purchasers will be responsible for demolition and slope stability issues

First-year Selkirk College student Terra-Mae Box is one of many talented writers who will read their work at the Black Bear Review’s annual (virtual) launch on April 22. Photo: Submitted
A grant from the province will fund the installation of lighting and electrical in the stage at Cottonwood Park and the construction of a washroom. Photo: Bill Metcalfe
City of Nelson receives grant for washroom and electrical at Cottonwood Falls Park stage

Grant will also fund concession stand and parking improvements

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

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

Prime Minister Justin Trudeau looks on as Deputy Prime Minister and Finance Minister Chrystia Freeland responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday, Aug. 18, 2020. THE CANADIAN PRESS/Adrian Wyld
Expectations high as Trudeau Liberals get ready to unveil first pandemic budget

The Liberals will look to thread an economic needle with Monday’s budget

Since April 4, 38 flights with COVID-19 cases have departed from Vancouver International Airport, while 23 arrived. (Phil McLachlan/Capital News)
Vancouver the largest source of domestic flights with COVID-19 cases: data

This month alone, 38 flights with COVID-19 cases have departed from Vancouver International Airport, while 23 arrived

Most Read