The CRA provided convenient ways for Canadians to get the CERB as quickly as possible. But they need to ensure that the CERB is kept only by people who were eligible. Your situation may have changed since you first applied, or you may have made an honest mistake when applying and this why you should pay it back before Dec 31, 2020.
The CRA website can help you determine if you should pay it back or if you were truly eligible for the CERB payments and here are some of the facts you should take into consideration:
You should return the amount if:
- You earned more income than expected during the time you received the CERB payment.
- Applied for and got the CERB from both Employment Insurance/Service Canada and from the CRA for the same eligibility period.
- Applied for the CERB but later realized you’re not eligible.
- If you got re-hired or found another job and started to earn employment income for the same eligibility period.
If any of the above cases applies to you, you should consider returning the amounts you received before Dec 31, 2020.
How to pay back your CERB?
Simply, return the payment to the department where you applied for it i.e. to the CRA or to Service Canada.
If you were paid by Direct Deposit from the CRA, you can return it either online through My CRA Account – by Debit Card, using the online banking – by adding the CRA as a payee OR by a cheque mailed to the CRA on the following address:
Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C3
If you were paid by a cheque and you still have it, you can return it to the same mailing address with a letter describing why you’re returning it – you can simply say “Not entitled OR Over-payment”.
If you were paid through EI/Service Canada, you can consult this Canada.ca link to get more info on how to return the amount to Service Canada.
It’s very important to use one of these methods and not to fail to any SCAM or Scammers who might ask you to pay the amount using any other mean.
What’s the impact on your taxes in case you don’t return the amount?
Your CERB amounts are taxable. You will need to report the amounts from your T4A tax information slip on your 2020 tax return. The CRA encourages you to return any payments you received in 2020 that you’re not eligible for before December 31, 2020.
If you return a CERB payment:
- Before December 31, 2020, and pay it in full, there is no impact on your 2020 taxes
- After December 31, 2020, you will need to pay tax on the full CERB amount you received in 2020 (this will only be adjusted after you file your 2021 taxes).
If you still have questions or if you don’t know if you should return your CERB payments, you can contact us and we are more than happy to give you more info.
Jad Antonios – Dec 08, 2020