May 2021 Update: COVID-19 benefits and your taxes

The Canada Revenue Agency (CRA) is committed to putting people first and providing the income support that Canadians need during the COVID-19 pandemic. Please see below quick links to essential resources and FAQs.

T4A: Report COVID-19 amounts

CERB from CRA, CESB, CRB, CRCB, CRSB, provincial or territorial COVID-19 benefits, issues on T4A slips, report amounts

T4E: Report COVID-19 amounts

CERB from Service Canada, EI benefit payments, issues with your T4E slip, and how to report amounts

Interest relief if you received COVID-19 benefits

Interest relief for individuals with a taxable income of $75,000 or less in 2020 and received a COVID-19 benefit

If you meet all the eligibility criteria below, you will get interest relief on your 2020 taxes owing. You still need to file your tax return by the due date to avoid paying any late-filing penalties.

Eligibility criteria

Interest relief on 2020 taxes owing will be given if you meet all of the following:

  • Your total 2020 taxable income was $75,000 or less
  • You received at least one COVID-19 benefit in 2020:
    • Canada Emergency Response Benefit (CERB)
    • Canada Emergency Student Benefit (CESB)
    • Canada Recovery Benefit (CRB)
    • Canada Recovery Caregiving Benefit (CRCB)
    • Canada Recovery Sickness Benefit (CRSB)
    • Employment Insurance (EI) benefits
    • Provincial or territorial emergency benefits
  • You filed your 2020 income tax and benefit return

You need all the above to be eligible for interest relief.

If you do not meet the criteria, review other options in Taxpayer relief provisions.

If you meet all the criteria

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.

Late-filing penalties still apply

File your tax return early or before the due date to avoid being charged a late-filing penalty and disruption of your benefit and credit payments such as the Canada Child Benefit (CCB) and the GST/HST credit.

The late-filing penalty is 5% of your 2020 balance owing, plus an additional 1% for each month you file after the due date (up to a maximum of 12 months). Penalty charges still apply and are different from interest charges. Penalty charges are not included as part of this interest relief.

The CRA can work with you and find flexible options to pay your balance owing. Find ways to pay your 2020 taxes owing.

Paying your 2020 taxes owing

Pay taxes you owe, options if you cannot pay, or arrange to pay over time

If you cannot pay in full

If you are not able to pay the full amount:

  • file on time to avoid paying a late-filing penalty
  • make a partial payment to reduce the amount of interest you need to pay on unpaid amounts

You can set up a payment arrangement to give yourself more time and flexibility to repay what you owe. For details: Arrange to pay your personal debt over time

If you are unable to pay, you can discuss your options with the CRA.

Repay COVID-19 benefits

Why you may need to repay a COVID-19 payment, how to return a payment, and how it impacts your taxes

COVID-19: Objections, appeals and taxpayer relief

Dispute resolution and taxpayer relief services are resuming.

CRA and COVID-19 Resuming business activities

Video: Taxpayer Relief

Cancel or waive penalties or interest

The Minister may grant relief from penalty or interest when the following types of situations prevent a taxpayer from meeting their tax obligations:

  • extraordinary circumstances;
  • actions of the CRA;
  • inability to pay or financial hardship;
  • other circumstances

For more information about the circumstances that may warrant relief from penalties or interest, see Cancel or waive penalties or interest. To submit your request for relief, we recommend you use Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest.

Late, amended, or revoked elections

The Income Tax Act and its Regulations contain many election provisions that give you the opportunity to decide on an alternative tax treatment in conducting your financial affairs for income tax purposes. Most election provisions do not:

  • permit you to file an election once the due date for making the election is missed; or
  • give you the ability to modify or cancel an original election that was filed on time.

For details about the income tax elections that can be filed late, amended, or revoked, and how to send your request, see Late, amended, or revoked elections.

Refund or reduce the amount payable beyond the normal three-year period

For individuals (other than a trust) and graduated rate estates, the Income Tax Act sets a three-year limitation period from the:

  • end of the tax year to file an income tax return to claim a tax refund
  • date of the original notice of assessment to request an adjustment to an assessment issued for a previous tax year

As of January 1, 2016, a testamentary trust that is not a graduated rate estate can no longer file an income tax return or ask for an adjustment for a refund or reduction in tax payable after the normal three-year period has expired for the 2016 and later tax years. Testamentary trusts can file a return or ask for an adjustment for the 2015 and previous tax years.

To get more information about filing an income tax return to claim a refund or requesting an adjustment to a return beyond the normal three-year period, see Refund or reduce the amount payable beyond the normal three-year period.

Public service employees affected by Phoenix payroll system issues

If you believe that the penalties or interest assessed by the Canada Revenue Agency (CRA) for your 2016, 2017 or 2018 tax year are a direct result of Phoenix payroll system errors, you can submit a claim under the Phoenix Claims Process administered by the Treasury Board of Canada Secretariat. Each claim will be considered on its individual merits and settled based on valid receipts and other supporting documentation.

If you are not reimbursed through the Phoenix Claims Process for the penalties or interest assessed by the CRA, you can submit a request for review under the taxpayer relief provisions. Go to Cancel or waive penalties or interest for more information. Be sure to include the decision letter from your department or agency and any relevant documents when submitting your request.

For more information on the tax implications of Phoenix payroll issues, go to Frequently Asked Questions.

The Canada Revenue Agency (CRA) administers legislation that gives the Minister of National Revenue discretion to:

  • cancel or waive penalties or interest
  • accept certain late, amended, or revoked income tax elections
  • issue a refund or make an adjustment to refund or reduce tax payable beyond the normal three-year period for an individual, a graduated rate estate, and for certain tax years, a testamentary trust

This legislation is commonly called the taxpayer relief provisions.


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