Tax deadline is Friday: Expert warns CERB recipients will likely owe money

VANCOUVER (NEWS 1130) – Tax deadline is Friday and for many Canadians, the return will look a bit different this year. That’s especially true for those who worked from home or needed government benefits during the COVID-19 pandemic.

If you took CERB, for example, you can expect to have money owing — not the full amount, just the part that is taxed like any other income you’d earn. But you won’t be expected to pay it back immediately. You have what national tax specialist Gerry Vittoratos with UFILE calls an “interest holiday.”

“If you received those benefits during the year and you owe money on your tax return, you don’t have to pay your balance owing until the 30th of April of next year,” he explained.

However, you are expected to submit your tax forms by Friday to avoid a late penalty.

“The penalty is quite stiff,” he said. “What the government will do is if you owe money to them and you don’t file your tax return by April 30, then they will charge you five per cent on the amount that you owe and then one per cent for every month that you are late with filing your return. There is no holiday on that one.”

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Vittoratos says those who worked from home will likely get some sort of refund, pointing out there’s a simplified way to declare that on the return this year.

“What the government has done is enlarged … how you can claim home office expenses,” he explained. “More specifically, they’ve introduced a new method of claiming home office expenses.”

That method is called the Temporary Flat Rate Method.

“For Canadians who were required to work from home for … more than 50 per cent of the time for four consecutive weeks can now claim a $2 per day deduction, up to a maximum of 200 days for the 2020 tax year,” he explained.

He says that essentially means your maximum deduction becomes $400.

“What’s great about it is the fact that … you have no administrative requirements. The government is not going to ask you for any cooperative documents, meaning a signed form from your employer or any other proof or receipts. All you have to do is meet that basic criteria,” Vittoratos said.

He notes people still have the option to instead use what he calls the “detailed method.”

“Where you can claim actual expenses that you incur for your home office. For example, rent, utilities, stationery — paper items, pens, etc. These are items which you can claim on a pro-rated basis based on … the square footage that your home office represents,” he said, noting that only makes financial sense if you would be claiming more than $400.

Vittoratos believes there will likely be more people owing the government money than receiving refunds.

“For those employees who were laid off and were collecting those benefits, the unfortunate reality is going to be that they’re going to be owing money,” he said.

He adds given the pandemic, a lot more people will be filing electronically.

“I think the paper return is going to start really disappearing soon,” he said.

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