The Canada Emergency Response Benefit might be the life jacket that keeps your head above water – financially speaking – during the pandemic. But don’t forget that you have to pay income tax on it… and it’s not deducted from your cheque.
Steve Blazinois the Northern Ontario tax leader for the accounting and tax consulting firm MNP.
“It is definitely taxable and it is not withheld at source,” Blazino confirms. “So you’re going to get the gross amount, but you will owe taxes at the end of the year.”
If you make under $45,000 this year, Blazino says the tax on CERB will be in the 5% to 20% range.
“It could be 30 per cent if your income is $45,000 to say $90,000 and then it goes up from there.”
Blazino’s advice is to put some of the money aside, so you don’t get dinged for it when you file your 2020 income tax return next spring.
“You’re deferring the problem. If at all possible, put the money aside.”
Several million Canadians have applied for the federal CERB.
*with files from Bob McIntyre MyTimminsNow.com staff