Bomcas Canada Accounting and Tax Preparation Services
Your COVID-19 benefits as well as your taxes
Depending on your situation, it’s likely that you received COVID-19 benefit payments from the federal, provincial, or territorial governments, respectively. Upon receipt of a T4A slip, you will be provided with detailed instructions on how to report the amounts in dispute on your tax return. In addition to payments for the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), and the Canada Recovery Caregivers Benefit, compensation for COVID-19 benefits includes payments for the Canada Recovery Caregivers Benefit (CRCB). It is likely that you did not get COVID-19 benefit payments as a result of this and, as a result, did not obtain a T4A slip.
In the case of self-employment, you must include COVID-19 support in your company revenue and expenses (for example, the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS), the Canada Recovery Hiring Program (CRHP), or the Fish Harvester Benefit and Grant Program) (FHBGP). Those of you who are self-employed and who have received COVID-19 assistance from the federal government should review this document. Obtaining a government loan is not taxable in and of itself; but, any portion of the loan that is forgiven by the federal government must be included in the gross revenue of your company as income.
It is possible that you will be obliged to repay the money you received under the CRB if your net income after certain adjustments exceeds $38,000 in a given year, depending on the circumstances.
If your income was exempt from taxation
In order to record income that is exempt from taxation under the Indian Act obtained from CRB, CRCB, or CRSB payments, you should utilize Form T90, Income Exempt from Taxation Under the Indian Act. To be eligible for a refund of the tax withheld from your derived income from these payments, you must include this form with your 2021 Income Tax and Benefit Return or simplified return, which must be filed by April 15, 2021.
Reimbursement of COVID-19 benefits by the federal government
On your T4A and T4E slips, if you were eligible for any federal COVID-19 benefits in 2020 (CERB, CRB, CRCB, or CRSB) and if you reimbursed those benefits on your T4A and T4E slips, the amount of federal COVID-19 benefits that you refunded will be shown on your T4A and T4E slips. If you have received a refund, the amount will appear on your T4A or T4E slip together with the other employment insurance (EI) sums that have been returned to you. Depending on your specific circumstances, you may be entitled to deduct the payback from your taxable income in either the year in which the benefit was received or the year in which the benefit was repaid, depending on your tax situation (whichever is later). The deduction can be divided between these two returns when calculating the deduction, as long as the total deduction does not exceed the amount of money that was repaid.
Individuals and families
Canada Workers Compensation
Canada Workers Benefit (CWB) rates and income requirements for fiscal year 2020 have been updated. A new tax cut has been created for those who are classified as “secondary earners.”
Zero-emission vehicles
According to a recent decision, the definition of a zero-emission car will be modified for vehicles purchased after March 1, 2020. Even if the automobile was previously subject to a capital cost allowance (CCA) or terminal loss claim, the taxpayer may still be eligible for a zero-emission vehicle if the automobile was not acquired by the taxpayer on a tax-deferred “rollover” basis, or if the automobile was previously owned or acquired by the taxpayer, a non-length arm’s person, or a partnership with which the taxpayer has a business relationship with the partnership.
Disability tax credit
There have been revisions to several rules, including those governing the mental functions essential for everyday living and life-sustaining therapy, as well as those governing the computation of therapy time.
Northern residents deductions
There have been changes and expansions to the deduction for travel benefits, making it available to all qualified northern residents who go on a trip, even if their company does not pay any travel benefits for personal travel.
Postdoctoral fellowship income
The income from postdoctoral fellowships will be regarded as earned income for the first time in 2021, when it comes to registering a registered retirement savings plan (RRSP). As a result of this adjustment, postdoctoral fellows will now have greater RRSP contribution room than they did previously in order to make deductible RRSP, pooled registered pension plan (PRPP), or specified pension plan (SPP) contributions.
For more information please call us today and one of our Accountant will be happy to help you with your taxes.
Location (Office)
9227 – 111 Ave. NW
Edmonton
Alberta T5G 0A2
Phone: 780-667-5250
Email: info@bomcas.ca