On the Radar from CLEO
CLEO On The Radar
March 2022
Tax tips and updates for 2021
Tax season is here again. Filing a tax return tells people how much money the government owes them or how much tax they must pay. It also lets people access several government benefits.
So, it's important for everyone to file their tax return, even if they have no taxable income.
COVID-19 benefits
COVID-19 benefits count towards a person's net income on their tax return. The Canada Revenue Agency (CRA) will send a T4A slip to tell people how much they received in COVID-19 benefits.
In 2021, the government took 10% from COVID-19 benefits before people got their money. So it's possible that people won't have to pay any extra tax. But it depends on their total taxable income.
There's a special rule for the Canada Recovery Benefit (CRB). If someone received the CRB and their total income for 2021 was $38,000 or more, they'll have to repay 50 cents for every dollar they made over the $38,000.
Interest relief for 2020
Usually, if people don't pay their taxes on time, the government charges them interest. But the government is not charging interest on taxes people owe for 2020 if all of the following apply:
  1. The person's taxable income was $75,000 or less.
  2. They received at least one COVID-19 benefit.
  3. They filed their 2020 tax return.
If all of these apply, the government automatically stops charging the person interest. They don't have to do anything. This change could help some people repay what they owe from 2020 more quickly.
If someone thinks that there's a problem with the amount of interest the government is charging them, they should contact the CRA.
Deductions for repaid benefits
If someone repays a federal COVID-19 benefit, they can deduct the amount they repaid from the taxes they owe.
The government has changed the rules so that people can choose to:
  • apply the deduction to the year they got the benefit,
  • apply it to the year they repaid it, or
  • split it between the years.
For example, in 2021, someone may have repaid a federal COVID-19 benefit that they received in 2020. They can claim that amount as a deduction on their tax return for 2020 or 2021, or split it between the two years.
Rent-geared-to-income housing
To keep getting a rent-geared-to-income (RGI) subsidy, tenants must file their taxes every year. This is because their subsidy is now based on the net income in their notice of assessment from the CRA. This change happened in July 2021.
If a tenant got COVID-19 benefits in 2021, their income may have been significantly higher than usual. This means that they could get less subsidy and have to pay more rent.
If this applies to them, tenants should talk to their housing provider. There may be another option for calculating the amount of their subsidy.
Tax credits and benefits
People need to file their taxes to get certain government benefits.
One of the most common benefits is the Canada child benefit (CCB). To get the CCB, people must file their taxes.
There are 2 tools that people can use to find the benefits and tax credits they may be eligible for:
A tax credit or benefit either:
  • reduces the amount of tax that a person has to pay, or
  • is money that the government pays to the person.
The deadline for people to file their taxes is May 2, 2022. Missing the deadline could delay when people get credits or benefits from the CRA.
They might also have to pay a penalty or interest on money that they owe to the CRA.
Getting help
People will have different tax questions and concerns depending on their situation.
For people who can't afford to get help filling out their tax return, there are free Volunteer Tax Preparation Clinics.
Community legal clinics may be able to refer people to local free tax clinics. People can also contact 211 Ontario.
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Related resources
Benefits wayfinder
Prosper Canada
Benefits Finder
Government of Canada
Free tax clinics
Community Volunteer Income Tax Program
Legal Clinics List
Legal Aid Ontario
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