Benefit Taxation

Canadians who received COVID-19 emergency or recovery benefits payments from the CRA will receive a slip called T4A.

Starting in early January 2021 and no later than March 10, 2021, Canadians will begin receiving T4A slips from the Canada Revenue Agency (CRA). The T4A is virtually identical to the T4 slips Canadians usually receive, but rather than employment income, they provide the amounts of COVID-19 emergency and recovery benefits received from the CRA in 2020.  Residents of Quebec will receive both a T4A and RL-1 slip.

Due to the unprecedented financial hardship brought on by the COVID-19 pandemic, millions of Canadians sought the support of the Government’s emergency or recovery benefits, which include the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB). These emergency and recovery benefits are considered taxable income, and recipients must enter the total of the amounts they received last year on their 2020 income tax and benefit return.

How do Canadians use the T4A to fill out their 2020 income tax and benefit return?

  • When filing:
  • Information from their T4A will need to be entered on line 13000 of their 2020 income tax and benefit return as income, just like a regular T4 slip.
  • If they are registered for My Account and filing with NETFILE-certified software, this information will be automatically entered into their return.
  • After they have entered the information and filed their return, they should keep their T4A slip, and all tax documents, for at least six years.

2)   After filing:

  • Since these payments are taxable, depending on their personal circumstances, the type of COVID-19 emergency benefits received, other sources of income, deductions and credits, your constituents may find that they owe tax.
  • The CRA understands the financial strain that this might cause, especially with the ongoing pandemic.
  • To help Canadians, payment arrangement parameters have been expanded to give Canadians more time and flexibility to pay any balance owing.
  • Individuals who cannot make a payment in full are advised to contact the CRA to make a payment arrangement.
  • It is important for Canadians to file their return by the filing deadline to keep receiving benefit and credit payments, such as the Canada Child Benefit.

3) What to do if there is an issue?

  • If you do not get a T4A slip:
  • If you received benefit payments and do not get a T4A slip by March 10, you should be able to get a copy through CRA’s My Account for individuals or by contacting the CRA

 

  • If there is a problem with the amounts reflected on the T4A:
  • If you notice that the T4A does not reflect the income you actually received: check whether you may have repaid an amount and it is not reflected on the slip, or did not make a repayment but the income reported on the slip has been reduced by some amount.
  • In either of these cases, contact the CRA by phone at 1-800-959-8281 or, for those outside of Canada and the US, at 1-613-940-8495.

 

  • If you get a T4E instead of a T4A:
  • Many Canadians applied for COVID-19 emergency benefits through Service Canada.
  • If you received these payments from Service Canada, you will get a T4E Statement of Employment Insurance and Other Benefits, so that you can complete their 2020 tax and benefit return.
  • Information from a T4E will need to be entered on line 11900 of the 2020 income tax and benefit return. As with a T4A, this information will be entered automatically for individuals who are registered for My Account and filing with NETFILE-certified software.
  • For more information on when you can expect the T4E from Service Canada,  contact the department through their various service channels.

 

4)        If you were not eligible for the benefit:

  • There have been questions in recent weeks about eligibility for the CERB and what to do if you believe you were ineligible.
  • It is important to note that no one has been deemed ineligible for the benefit, and there is no requirement for repayment at this time.
  • As has been stated, the Government of Canada continues to look at options to respond to these concerns.
  • The CRA is committed to being flexible and responsive to the different situations Canadians are in and will work with individuals on a case-by-case basis.

If you encounter difficulties with your benefits and taxes that you are unable to resolve through these means, please contact my office for assistance.