Concerned about filing your 2020 T1 tax return after receiving Covid-19 Benefits?
Here’s what to expect at tax time.
Do you usually file your own taxes? Are you concerned, or freaking out slightly, about how exactly to file those Covid-19 benefits you received?
No sweat! Here is a walkthrough of the different slips to be on the lookout for and where to record these correctly on your 2020 tax return.
If you received any of the Covid-19 emergency or recovery benefits last year you will be issued a T4A slip from the Canada Revenue Agency (CRA).
What is a T4A slip?
T4A slips are sort of a “catch all” used to report other income that is not found on your regular T4 slip from your employer. This is where most of the Covid-19 benefits will be reported.
Here is a list of benefits you should receive a T4A slip for:
(CERB) Canada Emergency Response Benefit (no tax withheld at source)
(CESB) Canada Emergency Student Benefit (no tax withheld at source)
(CRB) Canada Recovery Benefit (10% tax withheld at source)
(CRCB) Canada Recovery Caregiving Benefit (10% tax withheld at source)
(CRSB) Canada Recovery Sickness Benefit (10% tax withheld at source)
These T4A slips should be available at the latest by March 10, 2021. If by this time you have not received a T4A slip, you might be able to locate it on CRA My Account if you have signed up for this service. If not, contact the CRA directly.
But wait... there are a couple of incidents where you won’t be issued a T4A slip despite receiving benefits last year.
You have been issued a T4E slip instead. What is a T4E slip? Waves hand mysteriously and says in a persuasive Jedi mind-trick-type voice, “This is not the T4A slip you are looking for.” Or is it?
If you applied for the CERB through Service Canada or any Employment Insurance (EI) benefits you will have been issued a T4E slip (statement of employment insurance and other benefits) instead of a T4A slip. How to report both these slips will be explained below.
Another reason why you might not have been issued a T4A slip, is if your employer received the Canada Emergency Wage Subsidy (CEWS). If this is your situation, the income has already been reported on your regular T4 slip through your employer and no additional steps are necessary. Check Slips for Accuracy Now that you know what slips to look for, it’s important to make sure those slips report accurate amounts. Here is how to read them.
Each Covid-19 benefit has its own box number on the T4A slip (box 197-204) If you happened to receive more than one benefit, or have repaid amounts, this is where you check to make sure those amounts are correct.
Remember if you collected EI, or possibly CERB payments if you applied through Service Canada, you would have been issued a T4E slip and should check the amounts on any of those slips you receive as well. You can also utilize the CRA My Account service to review “Covid-19 Support Payment Application Details”. I highly recommend you sign up for this service if you haven’t already.
Contact the CRA if you find any discrepancies such as:
benefit amounts repaid (before December 31, 2020) that are not reflected correctly
incorrect personal information on your slips
you did not apply for any Covid-19 benefits but still received a T4A slip
If you did not apply for Covid-19 benefits and have made it this far into my blog, I'm impressed! Also, you might have just found the one piece of valuable information here for you. Kudos for sticking it out and please pass the rest of this blog info along to your friends. How to Report T4A and T4E Slips You probably already know that all Covid-19 benefits count toward your income on your 2020 tax return.
Here’s how to report that income.
You will need to enter all the benefit amounts (Box 197-204) from your T4A slip and provide the total amount on line 13000 (other income). If you received a CRB, CRCB or CRSB, there will have been 10% tax withheld at source on each payment. You can find these deducted amounts in Box 022 on your T4A slip. This gets entered on line 43700 (total income tax deducted) on your return.
If you received a T4E slip, the gross amount of benefits paid (including CERB) will need to be entered on line 11900 of your return. The amount of income tax deducted is also found in Box 022 and should be entered on line 43700 on your return. Make sure to include the amount repaid towards any previously received overpayments where applicable. So far, tax deadlines have not been extended this year. The deadline to file your return and pay your taxes remains as April 30, 2021 or if you or your spouse or common-law partner is self-employed, June 15, 2021. However, all taxes owing must still be paid by April 30, 2021. Still overwhelmed at the thought of preparing your 2020 tax return and would like some help?
Click here to receive a fee estimate from Airdrie Tax Services. Cheers,
and May the Force be With You!