- by Anne Finlay-Stewart, Editor
If you are one of almost half a million self-employed people who received distressing letters from the Canada Revenue Agency just in time for the holidays, we might have some useful news.
The letter, telling you that you need to re-pay CERB benefits you applied for in good faith, is based on a single word ...NET.
As of this afternoon, the landing page detailing the eligibility requirements on Canada.ca does not mention the word "net" when referring to income from self-employment. It reads: “You earned a minimum of $5,000 (before taxes) in the last 12 months, or in 2019, from one or more of the following sources:
- employment income
- self-employment income
- provincial benefit payments related to maternity or parental leave”
The word “net” (after declaring self-employment expenses) does appear in a Frequently Asked Questions section – an area that most people would not visit if they felt they were clear on the process.
However, “a CBC News search of archived internet pages shows that information about “net income” was added sometime after April 21”, so those who applied earlier would never have seen it, nor would there be any reason to look at FAQ during any re-application.
Sean Casey, MP for Charlottetown, said “he's been advising people that they're allowed to file an amendment to their 2019 tax returns, where they could shift some eligible expenses to another tax year or simply not claim them.
"That, he explained, could boost their declared net incomes and "retroactively make them eligible" for CERB.”
We are not income tax professionals, but we made some enquiries. You must honestly declare your full income on your tax return, but you have no obligation to claim every possible expense in any given year. You may owe some income tax when you have amended your return, but you could establish your eligibility for CERB.
We would always recommend you check with your bookkeeper or accountant before making changes.
Here are some links to amending your 2019 tax return:
How to change your return - Canada Revenue Agency
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/change-your-return.html
You may be able to make online changes to your T1 tax return using the ReFILE service directly from your EFILE or NETFILE certified tax preparation software, or with our Change my return service available in My Account.
For best results, download and open this form in Adobe Reader. See General information for details.
You can view this form in:
PDF t1-adj-20e.pdf
PDF fillable/saveable t1-adj-fill-20e.pdf
We hope this brings a little holiday hope to anyone in our community who finds themselves in this situation.
