Tax Tip Thursday

CERB & CEBA Updates

Happy second week of your new year!

I promise, this is the last time we are going to talk about CERB and CEBA. We’ll finally retire it after this.

CERB

I am getting lots of questions about CERB as they are really running the gambit on people that may not have been entitled to the benefit back in 2020.

You will likely get a letter from the CRA saying that you have to either prove your eligibility or pay back an amount.

There are generally a couple of reasons:

  • You were self employed and did not reach the $5k threshold. You may have to still prove that had $5k in revenues, but the requirement to have $5k in NET income was removed and if you repaid CERB due to that reason, you can get your money back! As I said, you may need to still prove the revenues, but you should be able to do that.
  • You received CERB while you were still employed. Quite often this is just a timing issue – and you might owe 1 payment

Contact the signer of the letter and find out exactly what the issue is before paying it back. if you need to provide supporting documentation, just gather everything they have requested, take copies and submit. If you were entitled, that will likely be the end of it.

CEBA

As everyone knows by now, the CEBA loans are due to be repaid by January 18 or to have started arrangements to get a loan to repay it by March 28.

Interest will start on your CEBA loan on January 19, 2024 and the outstanding balance of your CEBA loan will be subject to an interest rate of 5% per annum and continuing until your CEBA loan is repaid in full.

If you have an outstanding balance on your loan as of January 19, 2024, you will no longer qualify for loan forgiveness, unless you have applied for refinancing through us on or before January 18, 2024, in which case you can still qualify for partial loan forgiveness if the outstanding principal of your CEBA loan, other than the amount available to be forgiven, is repaid on or before March 28, 2024 (provided that interest shall commence on January 19, 2024).

The maturity date of your loan is December 31, 2026. On that date the full principal and all unpaid interest on your loan will be due and payable.

There are a lot of people fighting to have the deadline delayed another year.

We are rapidly running out of time if that is to happen.

If you want to take a chance, you could try delaying to the last minute if you have the funds available. I would make sure they are in the bank at the institution where the payment needs to be made. I would also contact your bank and confirm exactly when and how the funds need to be paid on the loan. I know a number of them are in the form of a credit card.

Whatever you decide to do, please ensure you either pay it back on time or make arrangements for a loan either to get the forgivable portion or to begin making payments on the full amount after the 18th, if you did not qualify.

Frauds and Scams

While it is Tax season now, it is also Fraud/Scam season.

Some things to remember and please be sure to make a point of telling elderly people in your especially. They are at the highest risk of being taken advantage.

  1. They will NEVER ask you to make payments by any kind of gift card
  2. They will NEVER threaten to send you to the jail
  3. They will NEVER ask you to make a payment by any method out of the ordinary

Do not give your sin number out or any personal information over the phone – even if you think it is the CRA.

Contact another family member or your accountant and ask them to assist you.

If it is legitimate, the person will be able to provide you with a phone number and an employee id number. You can then call into the main CRA number and determine if they are a legitimate employee.

Need Help?

As CERB/CEBA loans come due, it can be challenging to determine if you’re doing everything properly. It’s important to make sure that you are, though! Not only to reduce your financial exposure, but also to just get everything settled and done with. The best way to do that is to get professional help, and The Mad Accountant is the perfect place. Book your appointment today

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.