For most Canadians, the process of applying for, and then receiving, CERB was a breeze. According to the CRA, most applicants can complete the online application in less than two minutes and receive their payment by direct deposit within three business days.
But, with parts of the country starting to reopen, some companies, likely supported by Canada’s 75% emergency wage subsidy, are starting to re-hire previously laid-off workers. If you think you will soon be able to work again, you may want to think twice before deciding to reapply for another CERB payment, lest you be forced to return or reimburse CERB s ‘It turns out that you no longer meet the eligibility conditions for the coming period.
With this warning in mind, let’s take a look at the basic eligibility requirements for CERB and the steps to return it if you decide you are no longer eligible.
Who is eligible?
The CERB is accessible to workers residing in Canada, at least 15 years of age, who have not left their job voluntarily and who “stopped working for reasons related to COVID-19”. Note that you do not have to be officially laid off to receive the CERB because you can receive the benefit even if you remain attached to your business, provided that you meet all the eligibility conditions. This allows employees to continue to receive non-monetary benefits, such as medical and dental coverage, without affecting their eligibility. You can still qualify for CERB if you volunteer to be temporarily laid off by your employer to help manage pressures on their business.
You may also be eligible for CERB if you have stopped working for other reasons, such as being quarantined or sick from COVID-19, taking care of others because they are sick, or taking care of children (or other dependents) because their care facility is closed.
If you are self-employed, work as a sole proprietor, or your business is incorporated, you can also qualify if you meet the eligibility criteria.
Income conditions to be eligible for CERB
To be eligible for the CERB, you must have had (independent) employment income of at least $ 5,000 in 2019 or in the 12 months preceding the date of the application. The CRA has declared that, although filing a 2019 income tax return is not an eligibility requirement for obtaining the CERB, you will need to confirm when you apply online that you have met the $ 5,000 income requirement.
The $ 5,000 includes all (self-employment) income, including tips and fees. Pensions, student loans and grants are not considered employment income and are excluded. The $ 5,000 of income must not be earned in Canada, but, as indicated above, you must reside in Canada to receive the CERB.
Income limitation when collecting CERB
When you submit your first claim, you cannot have earned more than $ 1,000 (self-employed) employment income for 14 consecutive days or more during the four week benefit period of your claim. For subsequent claims, including the third claim period starting on Monday, you cannot have earned more than $ 1,000 of (self-employed) employment income for the entire four-week benefit period of your new claim.
The CRA said the requests will be checked against the tax records to confirm the income.
How much can you get?
CERB provides $ 500 per week for up to 16 weeks and is available from March 15, 2020 to October 3, 2020. You must apply before December 2, 2020 and can receive payments retroactively if you are eligible. The calculation of the 16 weeks begins with the first week for which you receive the CERB, but the 16 weeks should not be taken consecutively.
Repay the CERB
If you no longer meet the CERB eligibility conditions, you should not apply. The government is also encouraging Canadians who think they may return to work in the coming weeks, so they will no longer be eligible to consider waiting a little longer before applying for the coming period, so that you be able to make a “more informed decision.” . ”
You are required to reimburse the CERB if you no longer meet the eligibility conditions for the 4-week period in question. This can happen either because you have earned more than $ 1000 in (self-employed) income, you applied for CERB but later realized that you were not eligible, or that you received a payment CERB from Service Canada and the CRA for the same period.
To return an uncashed CERB check, simply return it by mail to the Sudbury Tax Center, to the attention of “Revenue Processing – CERB Refund”, along with your social insurance number and reason for which you are returning the check (“not authorized” or “overpayment”.)
If your CERB was paid by direct deposit or if you have already cashed the government check, you can mail your own CERB refund check to the above address or, from May 11, use a new feature on the My CRA file to pay it off. .
Finally, keep in mind that CERB is taxable but that no tax is withheld at source, so beneficiaries must estimate the tax liability they may owe taking into account all income for 2020. The beneficiaries will receive a T4A slip for the amount of CERB received.
If you refund a CERB payment, this amount will not be included on the T4A slip. To ensure that your 2020 tax slip is correctly issued, the CRA asks anyone required to repay their CERB to do so by December 31, 2020. If you need more time to repay, the beneficiaries are encouraged to contact the CRA by December .31, 2020 to ensure that they have an agreed reimbursement schedule.
Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Director General, Tax and Estate Planning, CIBC Private Wealth Management in Toronto.