Canada: Relief for individuals who received income support (COVID-19)

Canada: Relief, individuals who received income support

Certain individuals who received coronavirus (COVID-19)-related income assistance in 2020 may qualify for relief relating to these benefits.


Relief for self-employed taxpayers

Self-employed individuals with less than $5,000* of net self-employment income in 2019 (or in the 12 months prior to the date of their Canada emergency response benefit (CERB) application) and who applied for and received the CERB, will not have to repay it as long as gross self-employment income was at least $5,000 and all other CERB eligibility criteria were met.

In addition, the Canada Revenue Agency (CRA) announced that it will issue a “refund” to eligible self-employed CERB recipients who already repaid the benefit.

Relief from having to pay interest on income tax liability

The CRA announced certain targeted interest relief for individuals who had a total taxable income of $75,000 or less in 2020 and received COVID-19-related income relief through certain benefit programs.

The CRA stated that it will automatically apply this interest relief for individuals who meet the criteria, and that once these eligible taxpayers have filed their 2020 tax return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until 30 April 2022.

The CRA also noted that it will not apply any CRA-administered credits and benefits normally paid monthly or quarterly, such as the Canada child benefit or the goods and services tax / harmonized sales tax (GST/HST) credit, to reduce the individual's debt owing for the 2020 tax year.

Revenue Quebec announced that it will provide one year of interest relief until 30 April 2022 to certain individuals. To qualify, these taxpayers must have earned a total taxable income of $75,000 or less in 2020, have a tax balance owing on their 2020 tax return, and received benefits under certain programs.

KPMG observation

The CRA and Revenue Quebec have not extended the tax return filing deadline. Individuals need to complete and submit their 2020 tax returns by 30 April 2021 (or 15 June 2021, for self-employed individuals) to avoid late-filing penalties.

Read a February 2021 report prepared by the KPMG member firm in Canada

*$ = Canadian dollar

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