Everything you need to know about CERB reimbursement

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

Here’s what you need to know.

About 1.2 million refund notices have been sent by the Canada Revenue Agency (CRA) for one or another of the pandemic financial aids, including the Canada Emergency Response Benefit (CERB). In fact, according to a report submitted late last year by the Auditor General, more than $4.6 billion of the CERB was paid to ineligible individuals.

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Who cares?

Keeping in view the urgency of the situation, the government has decided to provide massive financial support to Canadians. Assistance is granted quickly after summary checks. But many people, in good faith or otherwise, have received pandemic benefits without being entitled to them.

Currently, Pendlind is reeling as the revenue authorities are carrying out inspections and sending thousands of refund requests. “There are different circumstances, for example, people who earned income through employment or self-employment during the period they received the CERB, or people who did not earn the required $5,000 in 12 months. Eligibility conditions for CERB as indicated in previous or 2019”, explains Anne-Marie Granger, Supervisor of Accounting Services for Businesses, Raymond Chabot Grant Thornton.

CRA details about it Site All the reasons why someone might have to repay any of the pandemic benefits credit-refund.html)

What you risk

If you are contacted 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 approach the tax authorities and work with them to find an agreement for reimbursement. If we do not give a sign of life, the CRA may take more stringent collection measures, such as seizure,” warned Anne-Marie Granger.

She adds that if the CRA doesn’t forgive the loan, it’s still possible to negotiate repayment terms that take more account of her personal financial situation. “The CRA, for example, may revise the monthly payments downward or extend the due date,” she said. Note that there are no penalties or interest if the taxpayer is unable to make a full refund.

Reimbursement by compensation

To recover the amounts due, the CRA also proceeds through compensation. This could mean keeping some or all of the tax refunds or GST credits you’re entitled to. Also, if you receive employment insurance benefits, up to 50% of this can be used to pay off your CERB loan.

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

Advice:

· You reported CERB or other pandemic relief on your tax return and paid taxes on those amounts, but the CRA is now asking you to repay those benefits. Note that you can recover excess tax paid on these amounts. To do this, fill out the form T1B Application for Exemption of Reimbursement of Federal Benefits Related to Covid-19 In previous year, accessible on ARC website. Therefore, the amount repaid in 2022 will be deducted from your 2020 or 2021 tax return or the return for 2022 and the tax year in which you benefit.

· Are you insolvent and have you taken steps with a trustee? Inform the latter that you owe CERB. These amounts can be included in a bankruptcy or consumer proposal.

· If you disagree with the CRA’s decision, you can submit a request for review. Information on submitting your request is included in the letter sent to you by the CRA, but can also be found on the agency’s website: Verify your claim – CRA COVID-19 benefits – Canada.ca. If the decision stands, you can go to federal court within 30 days to seek a judicial review.