The Beginner's Guide to 2021 Tax Acronyms.
There is little the federal government, or for that matter, any bureaucracy loves more than acronyms.By dictionary definition, an acronym is a name or word formed by the first initials of other words.During the pandemic year of 2020, acronyms took on a new importance for all of us. as. Governments rolled out various programs designed to cushion the economic shock of COVID 19.Some of those programs might carry an economic shock of their own. Here’s the CloudTax guide to these abbreviations—and the impact they could have on your 2020 tax return.
"2020 will be a tax year quite different from most for many people. Having all your information together is the first step toward completing your return"- Nim Balachandran, Founder/CEO Cloudtax.ca
CERB: The Canada Emergency Response Benefit. This was one of the first programs announced by the federal government. Aimed at quickly helping those whose employment was affected by restrictions, the benefit paid $2000 over several different four-week periods. On the plus side, people who needed financial help received funds immediately. However, no tax was deducted from the CERB. That means you could owe money, depending on the income you made. If you received CERB during 2020, you will get aT4A slip from the federal government. You can also find the slip on your MyService Canada account. Warning: some people may have to repay certain amounts from CERB, depending upon income during the qualifying periods. CEO Nim Balachandran has written a piece on CERB interest and repayment relief.CRB: Canada Recovery Benefit: The CRB covers people who would not be eligible for CERB or Employment Insurance benefit. There is one big difference. Payments of CRB did have 10 per cent tax withheld. Some bad news: If you made enough other income during the year, you may owe more than the amount the government deducted.CRCB: Canada Recovery Caregiving Benefit: The CRCB supports people who cannot work because they need to care for a child under the age 12, or an adult who needs supervision. The program pays out $500 dollars per household per week, but 10 per cent is deducted by the government for income tax purposes. Your specific financial situation will determine if you will need to pay more, or perhaps even receive a refund.CRSB: Canada Recovery Sickness Benefit: The CRSB covers those unable to work because they are sick or need to self isolate because of COVID-19. The program pays $500 dollars per week, with the government deducting 10 per cent for tax. Your specific financial situation will determine if you need to pay more, or perhaps even receive a refundCESB: Canada Emergency Student Benefit: The CESB was designed to help students in post secondary institutions. Eligibility requirements were quite extensive. The $1250 dollar basic payment could be upgraded by $750 dollars depending on specific situations. As in all tax discussions, amounts paid under CESB are taxable income.The Canada Revenue Agency says T4A slips detailing the amount you have received will be sent out to you by Mid March. While you can file your taxes electronically beginning on February 22nd, you should ensure you have all the information in order before filing. T4A slips are also available on your MyService Canada account.In the meantime, if you do have your slips together, we suggest you head to our calculator to work out the impact you might face.-30-