How CERB and EI benefits will affect taxpayers

Canadian citizens who collected CERB or EI benefits in 2020 can expect their tax returns to look different this year. With over $81 billion distributed through CERB and EI from March 15 to Oct. 3 2020, many people will owe money on their tax returns, some for the first time in their lives. 

Norm Levesque, a tax strategist with The Tax Expert in Windsor, said this will affect people in the lower to middle tax bracket.  

“Most people who got CERB for the seven months made $14,000 with no tax withheld on it; they’re already in a tax bracket of at least 13 per cent, which means if you take 13 per cent of 14,000, that’s a $1500 bill,” said Levesque. 

Rebecca Reaume, a 24-year-old woman from Windsor, collected CERB benefits from about April to August.  

“It was helpful and necessary because I did need to pay rent. I am a little anxious, but I did end up saving quite a bit and was aware that this would be a lot in taxes. I do have money set aside; hopefully, it is enough,” said Reaume. 

February 26 was the start date for Canadians to fill out their tax returns, and April 30 is the last day. Tax experts suggest Canadians fill out their tax returns as soon as possible.  

“If you haven’t filed by April 30, there is an additional five per cent penalty added plus one per cent per month that you are late, up to a maximum of 17 per cent,” said Levesque. 

Tax returns can be filed online or through the mail. For more information on how to file tax returns, visit https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/doing-your-taxes.html.