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How to file your first post-Covid taxes

Refunds may be smaller this year (surprise!) due to the government’s C19 financial help.

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It’s tax season, and things have changed because of COVID-19 shaking the world for most of the 2020 fiscal year. With the federal government providing many Canadians with financial assistance during the pandemic, filing taxes this year is a bit different. 

Stephanie Folahan, president of Premier Accounting and Tax in Halifax, says tax refunds may be smaller this year than previous ones. Ottawa’s C19 financial assistance programs such as CERB—the Canada Emergency Response Benefit—and the Canada Recovery Benefit (CRB) were definitely helpful, but are still taxable. Folahan says one of her clients who received $4,000 in refunds last year only got $300 this year, “because there was no tax withheld from CERB at the time of the disbursement.” 

She advises low-income earners–people who earn less than about $35,000 as part of a household, or less than $20,000 as an individual–to take advantage of the free tax clinic available for them through Halifax Public Libraries. Per the 2016 census, almost 30 percent of those over the age of 15 in private households in Halifax Regional Municipality made less than $19,000, meaning a large proportion of residents in HRM could still qualify for the program even five years later. 

The only catch is there’s already a long waitlist. 

HPL communications officer Kasia Morrison says “our estimated time between the first call to register to the date of their appointment can be a few weeks,” in an email response to The Coast about the free tax clinics. “March 1 was our first day and already we have registered almost 1,200 taxpayers, which is almost equal to the total number of taxpayers served in 2020.” But the Community Volunteer Income Tax Program volunteers are working through the list of registered taxpayers–and it’s not too late to volunteer. 

The CVITP, a collaboration with the Canada Revenue Agency and community programs, offers free help to people unable to prepare their income tax and benefit returns by themselves. In order to maintain safe distancing, the CRA is providing help over the phone. Eligible taxpayers may call any library branch to register their names. A CVITP volunteer then calls the eligible taxpayer to help them complete their tax return.

For newcomers in the province, Folahan recommends the services at ISANS, the Immigrant Services Association of Nova Scotia.

And for those who have high hopes for the new work-from-home credit, Folahan says it’s good, but doesn’t do too much for an employee. “It only reduces your taxable income by $400. So, whatever your tax bracket is, is what you would save from the $400 credit.”  Still, savings is savings, and it’s been a tough year. 

CERB may have also complicated things for those who receive the Canada Workers Benefit (formerly the Working Income Tax Benefit). The credit is meant to supplement the income of low-income earners, with Folahan saying the sweet spot is usually $18,000. But she warns, “if you got CERB, $14,000, and you worked for January and February, chances are you made a couple of thousand dollars there, you’re already not going to be eligible for it.”

She emphasizes the importance of people being more financially literate. She says people usually get stressed when it’s time to file their taxes because of how complicated things can be, especially with multiple employment histories. And with a last-minute appointment at H&R Block running upwards of $300, and an accountant from a firm more than that, many folks opt to go it alone. For more info from the government on how to get your things in order before the April 30 tax-filing deadline, visit the Canada.ca info page.

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