Everything you need to know about CERB reimbursement

Have you received a letter from the Canada Revenue Agency asking you to make Canada Emergency Response Benefit payments?

Here’s what you need to know.

About 1.2 million refund notices have been sent out by the Canada Revenue Agency (CRA) for one or another pandemic financial aid, including the Canada Emergency Response Benefit (CERB). In fact, more than $4.6 billion CERB could have been paid out to people who didn’t qualify, according to a report submitted by the Auditor General at the end of last year.

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Who is involved?

Given the urgency of the situation, the government at the time decided to provide Canadians with substantial financial support. Then help was quickly granted, after brief checks. But many people, with good faith or not, have received pandemic benefits without being entitled to them.

For now, the pendulum is swinging, as the Revenue Agency has carried out more checks and sent out thousands of refund applications. “There are different situations, for example people who earned income from employment or self-employment during the period they received the CERB, or who did not earn the required $5,000 in the 12 months earlier or in 2019, as provided in the terms. Eligibility for CERB,” explains Ann Marie Granger, Corporate Accounting Services Superintendent, Raymond Chabot Grant Thornton.

Cra details on location All the reasons one might have to pay off any pandemic benefits credit-refund.html)

What are you risking?

If you are approached by the CRA, know that the worst thing you can do is not respond to their requests and bury your head in the sand. In general, it is always recommended to contact and work with the tax authorities to reach an agreement on reimbursement. If we don’t give a sign of life, the CRA can take more stringent collection measures, such as seizure,” warns Anne-Marie Granger.

She adds that if the CRA does not forgive the debt, repayment terms can still be negotiated that take into account her personal financial situation. “The CRA could, for example, revise the monthly payments downward or extend the due date,” she adds. Note that there are no penalties or interest if the taxpayer cannot get a full refund.

Compensation payment

To recover amounts owed, the CRA also does compensation. This means that it keeps some or all of the tax refunds or GST credits that you are entitled to. Also, if you receive Employment Insurance benefits, up to 50% of it can be used to pay off your CERB debt.

Please note that this reimbursement process can apply even if you have already entered into a payment agreement and are making your payments.

advice:

You reported CERB or another pandemic exemption on your tax return and paid taxes on those amounts, but the CRA now requires you to pay back those benefits. Note that you can recover the excess tax on these amounts. To do this, fill out the form T1B application for deduction of federal benefit payments related to COVID-19 In the previous year, it could be accessed on the ARC website. Thus, the amount paid in 2022 will be deducted from your 2020 or 2021 tax return, or from your 2022 return and tax year in which you received the benefit.

Are you in bankruptcy and have you taken steps with a trustee? Notify the latter that you have debts related to CERB. These amounts may be included in a bankruptcy or consumer filing.

If you do not agree with the CRA’s decision, you may file a request for review. Information for submitting your application is included in the letter sent to you by the CRA, but can also be found on the agency’s website: Validate Your Claim – CRA COVID-19 Benefits – Canada.ca. If the decision remains the same, you can go to federal court within 30 days to request judicial review.