I got one of the Canada Recovery benefits in 2021. How will this affect the income tax I have to pay?

You may have received one of the Canada Recovery benefits:

If you did, when you fill out your income tax form T4A, you must list these payments as income. This means that you may have to pay money back to the government.

Most employees have taxes taken off their paycheques throughout the year. So, at tax time, you likely won't pay anything extra because your employer has already taken enough from your paycheque.

But payments from the Canada Recovery benefits are taxed a bit differently.

The Canadian government takes off a 10% tax before you get your Canada Recovery benefit payment. For example, the Canada Recovery Sickness Benefit amount is $500 each week, but what you actually get is $450.

This 10% tax might be enough. But depending on how much income you earned in 2021, you could owe the government more or you might even get that 10% back.

Special rules for the Canada Recovery Benefit

If you got the Canada Recovery Benefit (CRB), you might have to pay some of it back if you earned more than $38,000 in 2021.

This repayment rule is only for the CRB. It does not apply to the Canada Recovery Caregiving Benefit (CRCB), Canada Recovery Sickness Benefit (CRSB), or Canada Worker Lockdown Benefit (CWLB).

You don't have to pay any extra tax if you made $38,000 or less in 2021. You might even get some money back when you file your income tax form.

If you made more than $38,000 in 2021, for every dollar you make over $38,000 in 2021, you'll have to pay back 50 cents. The most you'll have to pay back is the full amount that you got in CRB benefits in 2021.

For example, if you made $40,000 in 2021, you'll have to pay back $1,000 of the money you got from the CRB. This is because:

$40,000 – $38,000 = $2,000
$2,000 x 0.50 cents = $1,000

The most you could make from the CRB in 2021 was $24,600. To have to pay that all back, you would have made $87,200. This is because:

$87,200 – $38,000 = $49,200
$49,200 x 0.50 cents = $24,600

Getting help with taxes

You might qualify for help filing your taxes. The government of Canada has a list of free tax clinics.

If you're living on a low income, your local community legal clinic might be able to help if you have questions about paying tax on the Canada Recovery benefits or repaying your benefits.

You might also be able to get help by contacting the Ontario Legal Information Centre, JusticeNet, or the Law Society Referral Service.

There are options if you don't think you can afford to pay. These include making a payment agreement with the Canada Revenue Agency, or asking them to cancel tax penalties or interest.

A credit counselling agency can also help if you have problems paying off tax debt or other debts, or if you have other financial worries.

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