Delean: How to declare CERB repayments on your taxes

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How repayments of COVID-19 assistance are reported on tax returns and how much of an increase seniors got for holding off on their Quebec Pension Plan applications last year were among the questions recently raised by readers.

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Q: “I got a notice and had to repay some of my CERB (Canada Emergency Response Benefit) money in 2021. How does that get handled on my taxes?”

A: Both Canada Revenue Agency and Revenue Quebec are giving you options on how to report reimbursements of overpayments from COVID-19 assistance programs such as CERB, the Canada Recovery Benefit (CRB) or the Canada Emergency Student Benefit. You can claim a deduction for the repayment in the tax year you returned the money, or the year you collected the benefit, or spread it over the two. Deductions usually are more impactful in years when income is higher, but they can also affect income-linked government benefits like the GST credit or Solidarity Tax Credit, so it’s worth studying all three options to see which is most beneficial. If you choose to carry it back to 2020, in whole or in part, then you’ll need to file requests with both tax departments for an adjustment to the tax returns already filed for that year. The deduction is claimed on Line 246 of the Quebec tax return and line 23210 of the federal one. (It was line 23200 in 2020.)

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Q: “I turned 66 in 2021 and, although I’m not working, have so far put off applying for my Quebec Pension Plan (QPP) checks. Will the amount I eventually receive be increased by just the bonus for waiting (0.7 per month after age 65) or do I get the annual cost-of-living adjustments as well?”

A: The indexation of QPP (2.7 per cent as of Jan. 1) applies only to pensions already being paid. You get an adjustment as well, but it’s a different number, based on increases in the average wage in Canada. That was 3.3 per cent last year, so you actually will receive a bigger bump than those already collecting QPP. That’s on top of the bonus of 0.7 per cent a month (8.4 per cent yearly) for delaying QPP. So holding off this past year actually boosted your eventual QPP check by almost 12 per cent.

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Q: “I completed the annual tax returns of my son-in-law and my daughter, who filed jointly. She died last year. Is her final return from her still a joint one?

A: Canada Revenue Agency says some credits, such as the basic personal amount, age amount and spouse or common-law partner amount, can still apply in the year one partner passes away. Ella’s income on her final return would be from Jan. 1 to her date of death. If any income is generated after — in an RRSP or RRIF, for instance, or from the Quebec Pension Plan death benefit if it’s not reported by the recipient — you’ll need to file an additional, separate return for her estate de ella.

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Q: “I would like to start a RESP (Registered Education Savings Plan) for my grandchild, but have held off because the parents intend to change the child’s name. Should I be worried about this?”

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A: Some RESPs even allow a change of beneficiary, so a name change shouldn’t be a problem (although you might want to mention it to the RESP provider before signing anything, just to be certain). The important detail is ensuring the child has a social insurance number. You can’t open a plan (and start receiving government grants in the child’s name on contributions you make) unless the child has a SIN.

The Montreal Gazette invites reader questions on tax, investment and personal-finance matters. If you have a query you’d like addressed, please send it by email to Paul Delean at [email protected]