For Canadians preparing last year's taxes will be a bit different.  Many businesses closed, emergency benefits were released, workers moved into home offices, and much more.  Here is some information that may help.

Emergency Benefits

The Canadian Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) were each released without taxes being withheld.  Look for a T4A tax reporting slip to include with your 2020 return.  The amount of the tax will vary depending on your total income, including the benefit. 

The second round of benefits released in September, Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB) all withheld 10% for taxes.  Depending on your overall income, this may or may not be sufficient to cover your taxes due.  With CRB you are also subject to a clawback rate of $0.50 for each CRB dollar paid over your 2020 income that exceeds $38,000.

If you received benefits to which you were not entitled and didn't repay them in 2020, those amounts will appear on your T4A.

Home Office

In order to claim home-office expenses, you will need to review all your receipts or ask for the appropriate forms from your employer.  If you have worked from home more than half (50%) of the time for at least four consecutive weeks due to COVID-19, you can claim $2 a day to a maximum of $400, a temporary flat-rate home office deduction.  There is also a detailed method for a home-office tax break.  You should use an online calculator to see which will benefit you better.

Ottawa provided a one-time, non-taxable $600 payment for disabled persons to help with the extra expenses with COVID.

Charitable Donations

Recognizing the impact of the virus through joblessness, increased domestic violence, and the struggle for many to simply survive with lower or no income, the federal and provincial governments offer tax credits for charitable donations.  Federally, there is a 15% credit on the first $200 and then 29% on anything over and above that initial $200.

As you can tell, completing your 2020 tax return may not be as cut and dried as it has been in the past.  It will be a good idea to get as much of a jump on your return as possible.  If you have not already done it, gather all your receipts and documentation into a single folder.  Catch up on all the latest releases.  There are online calculation forms that can be helpful.  Of course, there are programs for sale that will talk you through the entire return and ask appropriate questions.  If you are still confused, you may want to consult an accountant or tax preparation service.  April 30 is just around the corner and it may take you longer to navigate the forms and calculations.

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- The Capex Team