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

Interior Health nurses administer Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16. (Phil McLachlan/Kelowna Capital News)
69 new cases of COVID-19 in Interior Health

The total number of cases in the region is now at 9,840 since the pandemic began

Kelowna General Hospital (File photo)
Interior Health hospitals not strained by rising COVID case counts

While provincial hospitalizations rise, health care systems in the B.C. Interior remain robust, say officials

BC CDC data showing the geographic distribution of COVID cases in the province. (BC CDC photo)
One new case of COVID-19 in Golden

Cases continue to surge in surrounding areas

The Golden Golf Club will open for a new season on the links beginning April 24. (Claire Palmer photo)
Golden Golf club eyes April 24 start

The golf course is supporting local businesses with the driving range and mini-golf

An Interior Health nurse administers Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16, 2021. (Phil McLachlan/Kelowna Capital News)
105 new COVID-19 cases in Interior Health

Just over 8,000 new vaccine doses administered in the region for a total of 158,000 to date

A woman wears a protective face covering to help prevent the spread of COVID-19 as he walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
Top doctor warns B.C.’s daily cases could reach 3,000 as COVID hospitalizations surge

There are more than 400 people in hospital, with 125 of them in ICU

Vernon Fire Rescue Services responded to a truck fire on Dallas Road in Vernon April 15, 2021. (Brendan Shykora - Vernon Morning Star)
WATCH: Vernon firefighters quick to douse fully involved truck fire

The fire was near multiple structures and spreading along the ground upon crews’ arrival

The father of Aaliyah Rosa planted a tree and laid a plaque in her memory in 2018. (Langley Advance Times files)
Final witness will extend Langley child murder trial into May or June

Lengthy trial began last autumn with COVID and other factors forcing it to take longer than expected

The corner of 96th Avenue and Glover Road in Fort Langley now has traffic signals, and new “touchless” signal activation buttons. (Matthew Claxton/Langley Advance Times)
Busy Fort Langley intersection gets ‘touchless’ crosswalk signals

The new traffic light started operation in April

Fire crews tend to a collision that is causing severe traffic delays on the William R. Bennett bridge headed east into Kelowna. (Aaron Hemens - Kelowna Capital News)
7 vehicle collision on WR Bennett Bridge under investigation

The collision backed up traffic on the William R. Bennett bridge for much of the morning

Kelowna company celebrates milestone of producing 46 million masks in under a year.
46 million masks and counting: Kelowna company reaches 1 year milstone

In under a year, Breathe Manufacturing Ltd. in Kelowna has hit production of 46 million masks for front-line workers

The organizer of a Kelowna protest against COVID-19 restrictions was fined by the RCMP for the third time Saturday, Jan. 16, 2021. (File photo)
Kelowna RCMP investigating hit and run involving 11-year-old

Police said the boy suffered minor injuries

A crossing guard stops traffic as students wearing face masks to curb the spread of COVID-19 arrive at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. A number of schools in the Fraser Health region, including Woodward Hill, have reported cases of the B.1.7.7 COVID-19 variant first detected in the U.K. THE CANADIAN PRESS/Darryl Dyck
COVID-infected students in Lower Mainland schools transmitting to 1 to 2 others: data

Eight to 13 per cent of COVID cases among students in the Lower Mainland were acquired in schools, B.C. says

Most Read