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CRA Starts Validating CERB Payments

CRA Starts Validating CERB Payments

Sep 9, 2020

CRA Starts Validating CERB Payments: There may be a few more boxes on your 2020 T4 next in February.

CRA is requiring additional reporting on T4s this year to validate the Canada Wage Subsidy (CEWS), Canada Emergency Response Benefit (CERB) and the Canada Emergency student Benefit (CESB)

In March, CRA rushed to get out payments to Canadians to alleviate their financial stress. Little has been known about how employers were going to be reporting and verifying the subsidy amounts.

Yesterday CRA updated a post on their website detailing the reporting by employers on the T4 Statement of remuneration. The T4 statement of remuneration details the payments and retroactive payments made to an employee in a calendar year.

Besides reporting employment income in Box 14 or 71 there will be 4 additional boxes covering the periods the subsidies were applied for. They Are:

  • Code 57: Employment income – March 15 to May 9
  • Code 58: Employment income – May 10 to July 4
  • Code 59: Employment income – July 5 to August 29
  • Code 60: Employment income – August 30 to September 26

Each period, which aligns with periods relating to the Covid-19 benefit eligibility, pertain to the day the employee was paid, not necessarily the work the payment covered. For example, if an employer is reporting employment income for the period of April 25 to May 8, payable on May 14, that information would be reported under Code 58.

The CERB, CEWS and CESB were implemented quite quickly by CRA and some tax specialist and employers were wondering how the subsidies would be verified. Here is the start to the requirements.

Earlier this month CRA had announced that it was implementing new Covid-19 risk assessment tools to weed out fraudulent claims. In another update to CRA’s website there is now a post that allows a person to return or repay the CERB. There are various scenarios for repaying the CERB listed on the CRA’s website which include:

  • you earned employment or self-employment income earlier than expected
  • you applied for the CERB but later realize you’re not eligible
  • you receive a CERB payment from both Service Canada and the CRA for the same period

An article in the financial Post on August 27, 2020 stated that the national debt is exceeding $1 trillion and the Trudeau government continues to borrow billions of dollars to pay covid-19 subsidies to Canadians who may not need it.

Stated in the Financial post. Ottawa is transferring up to $11.8 billion to young people aged 15-24 who live as dependants in families with at least $100,000 in household income. Leaving almost 1 million young Canadians better off in this recession than in 2019. It’s been no wonder that employers are finding it hard to hire part time workers.

One of the questions that CRA should have asked CERB applicants is for their household income and whether the primary earner had been affected by the Covid-19 shutdown. CRA could have linked CERB payment s with 2019 income to verify the need of the subsidy.

As the CERB winds down on September 27th, the program will transition into the new EI program. Under the revised program, which will take place for one year, recipients still out of work can apply for unemployment insurance under less restrictive rules than before the pandemic. Canadians who were EI-eligible before the pandemic hit and received CERB through the Canada Revenue Agency, meanwhile, will need to apply for EI benefits from Service Canada.

More than eight million Canadians have accessed the CERB since March. Having paid out nearly $70 billion, it’s the most expensive pandemic program yet.

After Reading CRA Starts Validating CERB Payments, you can also Checkout Liberals to replace CERB with new benefit, simplified EI program

About the author

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I’m a bookkeeping technology geek who has been in this industry for over 20 years. My specialty is helping small business streamline their workload with paperless business systems.
I have also worked as a purchaser and a controller for several businesses. Currently I am Advanced Certified in Quickbooks and a variety of accounting programs.

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