The federal government’s Canada Emergency Response Benefit is now flowing into bank accounts across the country, but we should be mindful come tax season next year. The CERB provides a payment of $2,000 for 4 weeks for up to 16 weeks for workers left unemployed by COVID-19. While the money is a nice surprise, it’s still taxable as part of your yearly income. Something we should be aware of before spending it all according to Chris Carroll, a Chartered Professional Accountant in Deep River.
Carroll says if possible, those getting the benefit should set aside 20-30 percent of their payments each month to cover taxes at the end of 2020. However, if someone has RRSP contributions in the tax year it will serve to reduce your taxable income for the year.
