A Lloydminster accountant is offering residents some tax tips if they are claiming the federal government’s CERB benefit.
The Canadian Emergency Response Benefit has recently been expanded to include workers earning $1,000 or less a month, out of a seasonal job, or have run out recently of their EI benefits. Further announcements are expected as the Government works on legislation to support workers.
McGowan Chartered Professional Accountants business owner Kristen McGowan is advising residents that the CERB is a taxable benefit and that if they receive it, they’ll need to report it when they write their 2020 return.
“It will be included as income on your return, and there have been no deductions or anything withheld on it. So the tax due on that income will be due next year.”
McGowan adds that they are waiting on Canadian Revenue Agency guidance as to how exactly CERB income will be reported on tax returns, but that residents should anticipate a difference in their refund.
“If you’re normally used to a large refund, you may still get a refund, but it’ll be significantly reduced. If you collect the CERB for four months, that’s $8,000 in income. That’s going to significantly affect refunds that people are normally used to getting, or even rely on even. So it’s going to be more on the taxpayer end, and it may be a shock to the system.”
In the meantime, McGowan is working with several other accounting firms as part of the Chartered Professional Accountants of Canada organization. They have been working to clarify announcements, provide feedback on CERB’s tax-related matters and relay this information back to taxpayers.
“Honestly, most of my regular day to day work is done in the evening,” says McGowan “and during the day I’m just making sure I’m there for my clients to go through the aid that’s there, how to use it, what’s the announcement of the day, because announcements are coming out faster than they’re being implemented.”
The CPA aims to continue providing updates as information becomes available.