These changes would allow EI recipients to claim child care and disability support deductions
Finance proposed new legislation to temporarily allow Canadians receiving Employment Insurance (EI) and Quebec Parental Insurance Plan (QPIP) benefits to make the same claims for child care expense and disability supports deductions as COVID-19 income support recipients.
Finance says this change would ensure fair income tax treatment for all recipients of federal income support during the pandemic. This change will apply to income for the 2020 and 2021 tax years.
EI and QPIP recipients are currently unable to deduct childcare and disability support expenses against their EI/QPIP income. However, current legislation allows recipients of the Canada Emergency Response Benefit (CERB) and other COVID-19 emergency income to deduct these expenses against the income they receive from such government assistance. The child care expense and disability supports deductions generally provide tax relief (subject to limitations) for taxpayers who have incurred these expenses in order to earn employment or business income, pursue education or perform research.
The proposed legislation would amend the Income Tax Act to temporarily allow EI recipients to claim child care expenses and the disability supports deductions against their income from regular EI benefits (including EI special benefits) and QPIP benefits for 2020 and 2021.
For more information, contact your KPMG advisor.
Information is current to January 25, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
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