How COVID-19 affects you, your family, and your taxes.

February 4, 2021

Since the onset of COVID-19, both federal and provincial governments have introduced many measures to support Canadians. It’s a lot to take in, and as the crisis continues to evolve, H&R Block is committed to provide you with regular updates to help you navigate everything that’s going on.

Here’s what you can find in this article:

Tax Filing Deadlines

The deadline to file income tax returns has been extended to June 1st 2020, for both Canada Revenue Agency (CRA) and Revenu Québec tax returns. The deadline to pay any amounts owing was also extended to September 30th 2020.

What Happens if you File your Taxes Late

As long as you filed by September 30th, there shouldn’t be any problem. However, any further delay filing your taxes could mean an interruption to your benefit payments, GST/HST Credit payments, etc.

If you’re ready to file your taxes, H&R Block can help! Find the office nearest to you and get started today.

Top-ups for the Canada Child Benefit (CCB) and GST/HST Credit

The CRA increased the maximum annual Canada Child Benefit (CCB) payment amounts for 2019 to 2020 by $300 per child. This top-up amount was included with the May payment. In 2021, four additional payments will also be made to families with children under the age of 6. This includes:

  • $300 per child for families with a net income of $120,000 or less, and
  • $150 per child for families with a net income of more than $120,000

The government also added a GST/HST credit payment to those who usually receive them, in April, averaging $400 for individuals or $600 for couples.

Changes to the Employment Insurance (EI) Program

Starting September 27th 2020, changes have been made to Canada’s EI program to make it easier to qualify. A one-time credit of 300 hours for regular benefit claimants and 480 hours for special benefit claimants (sickness, maternity/parental, compassionate care, or family caregiver) will be given to all new EI claims, for a period of one year. These hours will be made available as far back as March 15th, 2020 for anyone looking to transition from CERB to EI but who previously didn’t have enough hours to qualify for EI.

Canada Recovery Benefit

A new program that started on September 27th 2020 for one year, has been introduced for workers who are not eligible for EI because they are not employees. This benefit will be particularly helpful for anyone who is self-employed or who has a ‘gig’-type of employment. The benefit provides $500 a week for up to 26 weeks.

In order to qualify, you must be at least 15 years old. You must also have been unable to work or have had your earnings reduced because of COVID-19, and you will need to have earned at least $5,000 from employment, self-employment, or EI sickness or parental benefits either in 2019, 2020 or in the 12-months prior to applying.

It’s important to note that there will be a clawback from this benefit on any tax returns that are filed with a net income over $38,000 – the clawback will be 50 cents for every dollar over and above that $38,000 net income threshold (excluding income from the Canada Recovery Benefit itself). This benefit will also be subject to 10% tax withholding, meaning 10% will be sent to the Canada Revenue Agency (CRA) before you receive it, so that you don’t need to pay back the taxable amount all at once when you prepare your yearly return.

Canada Recovery Sickness Benefit

This program is for workers who are at least 15 years old and unable to work at least 50% of their scheduled work because they are sick or must self-isolate, because of COVID-19. In order to qualify, you must have earned at least $5,000 in 2019, 2020 or in the 12 months before applying, and you must be self-employed or employed when you apply.

The program provides $500 per week, for up to two weeks.

It’s important to note that this benefit will be subject to 10% tax withholding, meaning 10% will be sent to the Canada Revenue Agency (CRA) before you receive it, so that you don’t need to pay back the taxable amount all at once when you prepare your yearly return.

Canada Recovery Caregiving Benefit (CRCB)

This program is for Canadians who are at least 15 years old and unable to work at least 50% of their scheduled work week because they need to care for a child under the age of 12 as schools, daycares, or care facilities are closed, or because they need to care for another family member who’s sick and has to quarantine.

The program provides $500 per week, for up to 26 weeks, for each household.

It’s important to note that this benefit will be subject to 10% tax withholding, meaning 10% will be sent to the Canada Revenue Agency (CRA) before you receive it, so that you don’t need to pay back the taxable amount all at once when you prepare your yearly return.

Additional Measures

The government has put several other measures into place, including:

Additional Provincial Measures

Many Canadian provinces created additional financial assistance programs, to help Canadians through this difficult time. We recommend you review your provincial government’s website to find out additional details that are relevant to you:

How H&R Block Can Help

If you have any questions about the impact of these changes, or if you’re wanting to prepare and file your taxes for any tax year but aren’t sure where to start, H&R Block Tax Experts are here to help. As a matter of fact, H&R Block clients who filed their 2019 tax return and received a refund saw an average refund increase of $117! You can learn all about the ways that H&R Block is providing service to our clients during the COVID-19 crisis, or if you’re ready to file your taxes now, find the H&R Block office nearest to you to get started today.

Other Available Resources

If you’re looking for specific changes related to business, students, or seniors, you can also check out these helpful articles:

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