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Real Talk: Elder financial abuse
Learn how to prevent and deal with elder financial abuse.
The government has a reputation for moving slowly—but when it comes to its response to the COVID-19 pandemic, government at all levels has moved quickly to help people and businesses survive.
“I have to hand it to the government. We find it big and plodding, but it did seem to be very reactive to situations,” says chartered accountant Bill Marr.
As we approach nearly a year of our pandemic-reality, there have been no shortage of COVID-19 support programs launched. While it may seem like a bit of alphabet soup of programs when it comes to the numerous acronyms, many—including Bill—have praised the usefulness of the government website and, most importantly, the resilience of applicants.
“People have adapted to these programs very quickly,” he says. “I am getting less inquiries about these programs now as people become more familiar with them.”
Now, as we’re getting ready to enter tax-season, if you’re one of the millions of Canadians who received government support in 2020, there are some things you’ll need to know before you get ready to file.
Personal taxes
The Canadian Recovery Benefit (CRB) is the flagship program for individuals, providing $500 per week for 26 weeks. This is taxable income, but how much you’ll have to pay back come tax time depend on how much your income was for all of 2020.
“At this point, just about everyone knows these funds are taxable,” says Bill. “But in some cases there will be issues with repayment, so people need to be aware they will owe taxes in many cases.”
Income tax rates vary according to the amount of income you earn and you can pay different rates on different portions of your income. In general, the more you make, the more taxes you can expect to pay.
There may even be tax implications for those who didn’t receive any government money in 2020—if you made the switch to working from home, you are likely eligible for up to $400 in tax deductions for expenses related to working from home.
Business taxes
The pandemic has hit some industries—like tourism and hospitality, for example—very hard. Business owners in those sectors have relied on the Canada Emergency Wage Subsidy (CEWS), which provides a wage subsidy of up to 75 per cent for eligible businesses. This subsidy is treated as an eligible reduction in expenses and does not require specialized tax forms on the part of business owners.
A newer program is the Canada Emergency Business Account (CEBA), which offers up to $60,000 through a combination of low-interest loans and grants. CEBA is open for applications until March 31, 2021. Business owners are required to pay the loan back by December 2022. If they do pay it back within that timeframe, up to $20,000 of the loan will be forgiven.
By now we’ve all heard the word “unprecedented” so many times it’s starting to lose its meaning. But still, filing your 2020 taxes is sure to include some new—and unprecedented—things to consider. Make sure you’re prepared and recognize that some things are yet to be determined. For example, if you owe money from receiving COVID-19 support benefits but can’t pay it back, government may allow repayment over time.
“It’s hard to predict at this point,” Bill says. “These programs have been built very quickly and so they are changing quickly, as well.”
If you need more advice or are unsure of what you qualify for—or might need to pay back—your local credit union can help.