Repayment of federal COVID-19 benefits
The 2021 budget proposes that individuals can choose to claim a deduction for repayments made before January 1, 2023, of COVID-19 benefit amounts they were not entitled to receive (or choose to repay), on their income tax return for the year they received the benefit rather than on the return for the year they repaid the benefit. It also allows them to split the deduction between those two returns as long as the total deduction is not more than the total amount repaid.
If the taxpayer repaid in 2021 federal COVID-19 benefits that he received in 2020, they can therefore choose to claim a deduction in their 2020 return (the year in which the benefit was received) or in their 2021 return (the year in which the benefit was repaid). They can also choose to split the deduction between these two returns, provided that the total deduction does not exceed the repaid amount.
The amount repaid will be shown in box 201 of their T4A slip.
For tax year 2020, new option entitled "[201] F23200 Repayments related to COVID-19 assis. payments" was therefore added for the keyword Other-Income.t pertaining to box 028+ of the T4A slip in the keyword group T-Slip . This amount will be carried over to line 23200 of the federal return, and to line 246 of the Quebec return for residents of this province if applicable.
If the 2020 return has already been filed, the taxpayer can request an adjustment to his return by using the ReFILE service, by submitting the T1-ADJ form in paper format, or by making the request directly online via the Change my return service in My Account.
To learn more, visit the Tax Treatment of COVID-19 Benefit Amounts page which provides additional useful information in the form of questions and answers relating to the above changes, including some examples.
