The COVID-19 pandemic saw the loss of thousands of jobs and businesses in Canada, with the unemployment rate increasing to 9.4% in January 2021, the equivalent of 213,000 jobs lost. The first 3 months of the pandemic decimated three million jobs in Canada, many of them in Ontario and Quebec. To combat this economic disaster, the Canadian Federal government offered COVID-19 Emergency Recovery Benefit payments, also known as CERB, to Canadians who had their income affected by the pandemic. CERB is not a grant, however; it’s classified as income, meaning Canadians need to pay taxes on it this tax season. When preparing your taxes, there are a few extra pieces of information you need to consider if you’ve received COVID-19 benefits.
Find out which of your COVID-19 benefits are taxable.
What is The T4A Slip and How is it Different From a T4?
The T4A is a Statement of Pension, Retirement, Annuity and Other Income. Essentially, T4A slips are identical to T4 slips except in the source of the income listed. The T4A lists income received from anywhere other than an employer. In the case of COVID-19, T4A slips will be issued to anyone who received money from the CRA in the form of COVID-19 benefits. Eligible recipients include those who received:
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Recovery Sickness Benefit (CRSB)
- Provincial or territorial COVID-19 financial assistance payments
In other cases outside of those who have received income specifically in COVID-19 benefits, income listed on T4A slips can include self-employment income, Old Age Security Pension, and anywhere else that isn’t an employer.
Check out these tax tips for low income earners.
Types of T4A Slips
Apart from the T4A slips issued to recipients of COVID-19 benefits, here is a list of different T4A slips issued to people receiving income from other sources:
- T4A(P) – Statement of Canada Pension Plan Benefits
- T4A(OAS) – Statement of Old Age Security
- T4A-RCA Statement of Distributions from a Retirement Compensation Arrangement
- And the plain, no-frills or extra letters T4A – Statement of Pension, Retirement Annuity, and Other Income
What if You Haven’t Received a T4A Slip?
The CRA states that all recipients of CERB should receive the T4A slip by March 10, 2021. If you do not receive the slip, you can check your CRA My Account or contact the CRA directly to inquire. Additionally, if you received EI instead of CERB, you will not receive the T4A slip, but rather you’ll receive the T4E Slip. If you’re an employer who struggled to cover employee wages throughout the pandemic, you would have been eligible for the Canadian Emergency Wage Subsidy, requiring you to fill out a T4 form instead of a T4A.
Reporting Your T4A Slip on Your Tax Return
If you’ve received a T4A slip for COVID-19 benefits, you can find the income listed in boxes 197-204. You’ll need to add up each COVID-19 benefit payment amount on your T4A slip and input that total on line 13000 of your tax return, and specify the type of income.
On your T4A slip, you’ll also notice that the CRA would have removed a 10% tax on each payment if you received CERB, CRCB, or CRSB, as seen in box 022. You’ll need to input this deduction onto line 43700 on your tax return.
Note: if you received the Canada Recovery Benefit (CRB) and your income was more than 38,000 in 2020, you will have to pay $0.50 of the CRB for every dollar of net income earned over $38,000.
For more information on filing your tax return, visit the CRA’s website.
The COVID-19 pandemic has caused enough pain and struggles for Canadians. To ensure you are on track this tax season, make sure to keep aware of your tax obligations if you’ve received income from the government in COVID-19 benefits.