CRA Says “Rare” Error in Some Tax Slips Lists Repaid CERB as Taxable Income

When the COVID-19 pandemic closed schools last spring, crosswalk guard and recent graduate Danny Thomson were 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.

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.

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.

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.

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.

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