The CRB has ended. Here’s how it may impact Canadians’ taxes

If you earned more than $38,000 in net income excluding the CRB, you may have to repay part of the benefit.

The Canada Recovery Benefit, which replaced the Canada Emergency Response Benefit (CERB) for self-employed Canadians, has ended. But for the hundreds of thousands of people who received the benefit in 2021, the tax consequences of the federal income support programs will spill into 2022.

Finance Minister Chrystia Freeland announced Oct. 21 that Ottawa would wind down the CRB, along with Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS), as of Oct. 23.

Beginning in September 2020, the CRB provided $1,000 — later scaled back to $600 — every two weeks to Canadians who weren’t able to work or had seen a reduction of at least 50 per cent of their weekly income because of COVID-19 and were not eligible for Employment Insurance.

Unlike with the CERB, Ottawa withheld 10 per cent tax at source on all CRB payments. However, recipients may have to pay more tax on their CRB income at tax time. And anyone with net income above $38,000 in a calendar year will have to repay $0.50 of the benefit for every $1 of net income above the threshold.

If you received CRB and are wondering how much to set aside for your 2021 tax bill, here’s what you should know.

If you have a good idea of what your income will be for 2021, you can estimate how much, if anything, you’ll have to reimburse the government in CRB payments, says Neal Winokur, a chartered professional accountant and author of The Grumpy Accountant.

The first step is to calculate your net income. This is your total income for the year minus any applicable tax deductions. Your sources of income may go beyond your employment or self-employment income to include commissions, tips, pensions, rental or investment income, if applicable, as well as some government benefits, including COVID-19 supports like the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB).

When you’re trying to figure out your CRB clawback amount, though, do not include the CRB itself in your total income, Winokur says. The government wants to know whether you earned more than $38,000 in the year in addition to the payments you received through the CRB.