Feigenbaum Law

Canada Child Benefit, CERB and Personal Tax Filing Updates

Personal Tax Planning
May 22, 2020

Families across Canada woke up to a boost in their bank accounts on Wednesday, May 20, after the government sent payments of up to $300 per child under the Canada Child Benefit (CCB), to many parents across the country. The financial boost is intended to help families offset increased costs related to the COVID-19 pandemic. As the economy has suffered tremendously in recent months, there is also hope that the extra income will act as a stimulus for Canada’s retail sector, especially as brick and mortar stores in several provinces are beginning to reopen.

Who Qualifies for the Increase?

The one-time increase in CCB payments was made available and automatically provided to parents who one or more eligible children in their care during May 2020 and who filed their 2018 tax returns. The exact amount made available to parents could be as high as $300 per child, but even parents who have income high enough to normally preclude them from receiving monthly CCB payments may have qualified for the top-up, though they would receive a pro-rated amount.

A government official told the CBC that 3.7 million Canadian families currently collect the CCB and about 50,000 families who don’t normally receive CCB payments qualified for a reduced payment this month. The article explains that families with a net income of $215,000 in 2018 did not qualify for regular monthly CCB payments, but a similar-sized family with a net income of $212,000 did. The pro-rated boost was intended do provide something to those families who would ordinarily just miss the threshold to receive regular payments.

Tax Deadlines Worth Remembering

Following the outbreak of COVID-19 in Canada, the Canada Revenue Agency (CRA) announced that it was pushing the personal tax filing deadline back to June 1, 2020. We wanted to take a moment to remind our readers that this deadline is just over a week away. Self-employed Canadians are still required to file their taxes by June 15, with no extension offered. Payments owing for personal taxes for 2019 can be deferred until September 1, 2020, with no accrual of interest of late payment penalties.

In addition, people receiving the Canada Emergency Relief Benefit (CERB) should be reminded that while the eligibility period to receive the benefit has been extended, the total time period to collect the benefit is still capped at four months. For those who started to receive the benefit in March, when it was first made available, June will be the last month they are able to collect the $2,000 payment.

A Warning for Those Abusing the CERB

When the CERB program was announced, the CRA noted that all applications would be automatically approved in order to avoid delays in payment. This means that some people who should not have qualified may have received payments under the program.

In recognizing the potential for abuse, the CRA has stated that it intends to validate claims at a later date. The CRA has not stated if any special consequences would be applied to dishonest claimants but has said that they could claw back any money received inappropriately.

In addition to this, the CRA has also implemented procedures to flag any “high risk” applications. In one example provide to the CBC, the CRA said that a “very old person” who applies for CERB may be flagged because it is unlikely that person had a job to lose.

If you think there is a chance you may have applied for and received CERB benefits you did not qualify for, you should be prepared to repay any amounts you have received. If you have concerns about this and would like further guidance, you should speak with a qualified accountant as soon as possible.

Contact Feigenbaum Law for a custom solution to your personal tax planning needs. Our lawyers and financial professionals have unparalleled knowledge of tax law both in the United States and Canada. Contact us about making your transition across the border as smooth as possible. We offer services to clients in the US, Canada and around the world. Contact us to learn more about how we can help or call us at (905) 695-1269 or toll-free at (877) 275-4792.


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