This past year of 2020 has been a difficult one for all of us. Many of us have been financially affected in ways that were the least expected and we understand this. For many, a simple emergency fund was probably not enough to get through these past months especially if you had lost a job for some period of time or had a significant decrease in your income. Seeking unemployment or some government COVID-19 financial aid may have been the only option for many people experiencing low to no income for a period of time.
We discuss this because it is very important to stay up to date with tax regulations for tax season coming up. We want to take this opportunity to help inform our customers of what may lie ahead regarding benefits and taxes.
T4A Slips
With the government providing income support to many families and individuals, it becomes crucial to understand what amounts will be reported during tax time.
If you received any COVID-19 emergency or recovery benefits from the Canada Recovery Agency (CRA), please note you will get T4A slips for the amounts you received in benefits. These benefit amounts are taxable and must be reported.
You will get a T4A slip if you received:
You will receive one T4A slip which includes all your COVID-19 benefit payments from the CRA.
T4E Slips for 2020 tax year
Further, if you received Canada Emergency Response Benefit (CERB) from Service Canada or any Employment Insurance (EI) benefit payment, any benefit amount received before December 31, 2020 is taxable and must be reported. You will receive a T4E tax slip for the amount you received.
Interest Relief
The government is further providing interest relief to individuals who meet a particular criteria as provided here,
If you meet all eligibility criteria and have filed your 2020 tax return, the CRA will automatically apply interest relief on your 2020 taxes owing.You will not have to pay interest on any amount owing from your 2020 taxes until April 30, 2022. Interest relief only applies to your 2020 taxes owing and not on previous or other debts with the CRA.
H&T Accounting Services work around the clock meeting all client needs. We are here to answer all your questions that you may have. Call us TODAY for any financial need you may have!
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