2020 Personal Tax Return: How CERB and CRB Affected Your Tax Bill

The Canada Emergency Response Benefit (CERB) and Canada Recovery Benefit (CRB) helped Canadians who experienced income losses during the COVID-19 pandemic. However, receiving these benefits also affected personal income taxes.

Many individuals were surprised to discover that pandemic benefits were taxable and could create additional tax liabilities when filing their 2020 personal tax returns.

Although both programs have ended, understanding their historical tax treatment remains useful when reviewing CRA assessments, correcting returns, or addressing repayments.

This guide explains how CERB and CRB affected taxes in 2020, including practical calculations.

1. Were CERB and CRB Taxable in 2020?

Yes. Both CERB and CRB were generally considered taxable income.

Recipients had to include the applicable amounts when preparing their 2020 income tax returns.

However, the two programs had different withholding rules.

CERB: Payments were issued without income tax deductions. Recipients generally received the full $2,000 for each eligible four-week period.

CRB: The government withheld 10% income tax before issuing payments. For a $1,000 gross payment, recipients generally received $900.

The 10% withholding did not necessarily cover the recipient’s final income tax liability.

2. How Did CERB Affect Your Tax Bill?

CERB income was added to other taxable income received during 2020.

The amount of tax payable depended on employment earnings, self-employment income, deductions, credits, and provincial tax rates.

Example:

Income source	Amount
Employment income	$25,000
CERB payments	$10,000
Total income before deductions	$35,000

The taxpayer would calculate income tax using the applicable 2020 federal and provincial rates.

Any income tax already withheld by the employer would be credited against the total tax liability.

Because CERB had no withholding, the recipient might owe additional taxes.

The actual balance would depend on the complete return.

3. How Did CRB Affect Your Taxes?

CRB began in September 2020 and supported eligible individuals whose employment or self-employment income was affected by COVID-19.

Eligible recipients initially received $1,000 gross for each two-week period.

The CRA withheld $100, resulting in a $900 payment.

For example, someone receiving $4,000 gross in CRB would generally have $400 withheld.

The full $4,000 still counted as taxable income.

The withheld $400 was credited toward the person’s income tax liability.

If the final tax exceeded the amount withheld, additional tax could become payable.

4. Example: Receiving Both CERB and CRB

Some Canadians received CERB earlier in 2020 and CRB after the original program ended.

Consider this simplified example:

Income source	Amount
Employment income	$20,000
CERB received	$8,000
CRB received (gross)	$4,000
Combined income before deductions	$32,000
Income tax withheld from CRB	$400

The taxpayer’s income tax calculation would generally include $32,000 before applicable deductions.

The $400 withheld from CRB, along with employment tax deductions, would reduce the remaining income tax balance.

This example illustrates income reporting, not the final tax payable.

Actual results depend on the taxpayer’s province, other income, deductions, credits, and withholding.

5. Understanding the CRB Repayment Rule

CRB included an additional income-based repayment requirement.

For 2020, recipients generally had to repay $0.50 of CRB for every dollar of adjusted net income above $38,000.

The repayment could not exceed the CRB received during that year.

For example, an eligible recipient with adjusted income of $42,000 would have $4,000 above the threshold.

The resulting CRB repayment would generally be $2,000, provided the recipient had received at least that much CRB.

The calculation used specific income adjustments and excluded CRB itself.

This repayment requirement was separate from ordinary income tax.

6. How Were CERB and CRB Reported?

Taxpayers generally received information slips showing pandemic benefits paid during 2020.

CRA-issued benefits were reported on T4A slips.

Relevant boxes included:

• Box 197: CERB.
• Box 202: CRB.

Both amounts were generally reported on Line 13000 of the personal income tax return.

CERB issued through Service Canada was generally included on a T4E slip and reported according to the applicable Employment Insurance reporting instructions.

Taxpayers should review all slips to avoid missing or duplicating benefit income.

7. What If You Were Self-Employed?

Self-employed individuals had additional reporting responsibilities.

Business income was generally calculated after deducting eligible business expenses.

CERB and CRB were reported separately from ordinary self-employment revenue.

For example, someone operating a small business might have earned $18,000 in net business income and received $8,000 in CERB.

Their combined income before other deductions would generally include both amounts.

Self-employed individuals could also have CPP contribution obligations relating to their business earnings.

The government benefits themselves were not treated as self-employment revenue.

8. What If You Repaid Benefits?

Some taxpayers later repaid CERB or CRB because they received benefits they were not entitled to retain.

Repayment deductions depended on when the money was returned.

Qualifying repayments made in 2021 or 2022 generally offered options to claim the deduction in the repayment year, original benefit year, or between eligible years.

Repayments made in 2023 or later generally must be deducted in the repayment year.

Bajwa CPA offers personal tax return services for individuals reviewing tax reporting and related adjustments.

Keep repayment confirmations and review CRA records before amending historical returns.

9. What If Your 2020 Tax Return Was Incorrect?

An adjustment may be necessary if CERB or CRB income was omitted or reported incorrectly.

Review your original return, T4A or T4E slips, notices of assessment, and repayment records.

A CRA reassessment may also affect income-tested tax credits and benefits.

Bajwa CPA provides tax filing deadlines and resources to help taxpayers understand reporting requirements.

Professional assistance may be useful when a correction involves multiple benefits or repayment deductions.

Frequently Asked Questions

1. Was CERB taxable in 2020?

Yes. CERB was generally taxable income, with no income tax withheld from payments.

2. Was CRB taxable in 2020?

Yes. CRB was taxable, and 10% income tax was generally withheld at source.

3. How much tax was payable on CERB?

There was no fixed amount. Tax depended on total income, deductions, credits, and applicable tax rates.

4. Did everyone have to repay CRB?

No. The income-based repayment generally applied when adjusted income exceeded $38,000, subject to the program’s rules.

5. Can CERB or CRB repayments reduce taxable income?

Qualifying repayments may be deductible, depending on the repayment date and applicable CRA requirements.

6. Can I still correct a 2020 tax return?

The CRA has procedures for requesting adjustments to previous returns. Whether a particular adjustment is available depends on the circumstances and applicable time limits.

Get Professional Personal Tax Assistance

CERB and CRB provided temporary financial relief, but their tax treatment sometimes resulted in unexpected balances or repayment obligations.

Bajwa CPA Professional Corporation provides personal income tax preparation and accounting assistance for individuals throughout Ontario.

Explore Bajwa CPA as a CPA firm in Brampton and Mississauga to discuss historical tax reporting or CRA assessment concerns.

Phone: 416-907-0568

Email: info@bajwacpa.com

Contact Bajwa CPA to review your tax circumstances and available professional services.