Filing 2020 taxes late could lead to months of delays for COVID-19 financial aid, says CRA

TORONTO — With all there is to worry about regarding the pandemic and our working lives, the idea of rushing to file income tax returns on time this year may seem a bit quaint. But anyone hoping to receive any of the various COVD-19 relief benefits going forward could face delays of up to two months if they miss the April 30 deadline, the Canada Revenue Agency warns.

In the latest post on its “Tax tips – 2021” page, the CRA acknowledges the challenges that some Canadians may face meeting their filing obligations this year, but points out that it needs 2020 tax information to determine eligibility for the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB) or the Canada Recovery Sickness Benefit (CRSB).

All three programs require applicants to have earned at least $5,000 in 2019, 2020, or in the 12 months before the date of application.

“The CRA has implemented additional up-front verification and security measures for COVID-19 recovery benefits to help ensure that those receiving the benefits are eligible as these benefits were designed to replace income,” the agency says. “Filing on time avoids having your recovery benefit payments paused while we validate your eligibility.”

“If the CRA needs additional information, it may take up to eight weeks for them to process the application from the time the requested documentation is received,” it added.

The agency says on-time filings can be processed within 3-5 business days, though it encourages those using paper returns to file early as it can take 10 to 12 weeks to process those returns. More than 90 per cent of tax filers in Canada file electronically.

Last week, the federal government came under pressure from Opposition Conservatives to delay this year’s tax-filing deadline, and Quebec has said it will push its deadline to the end of May. Francisco Sorbara, parliamentary secretary to the revenue minister, responded in the House of Commons question period that Canadians should file on time to avoid an interruption of benefits.

Canada’s initial benefits rollout last year endured some hiccups as the government scrambled to quickly put measures in place to deal with the economic effect of lockdowns. The initial benefit – the Canadian Emergency Response Benefit (CERB) – was rolled out on a ‘trust then verify’ basis, which did not require a 2019 tax filing.

Confusion over whether the $5,000 income eligibility for CERB should be calculated from gross or net income led to many recipients being told they’d need to repay thousands of dollars in aid when the government clarified late last year eligibility was determined by the higher net income bar. The government eventually reversed course and said people who had applied thinking gross income was the requirement would not have to repay benefits.

But the issue of benefit repayments will be a feature of this tax season for filers who may have earned more income than expected last year, or who received CERB payments from both the CRA and through employment insurance. Last month, Canada’s auditor general said more than $500 million of double CERB payments had been made through both programs.

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