Applying COVID Benefits Repayments Gets Easier

Walter Harder

CRA is introducing a new form for tax filing season 2022, which will make the application of a repayment of COVID-19 benefits easier. The repayment can be claimed as a deduction, which will generate a refund. 

Form T1B, Request to Deduct Federal COVID-19 Benefits Repayment in a Prior Year, can be used to apply repayments of COVID-19 benefits made in 2022 to the year the benefits were received, or to split the deduction between 2022 and the year the benefits were received.

This form can be used for the repayment of CERB, CESB, CRB, CRSB, and CRCB benefits made in 2022.

While this option was available in 2021 to apply repayments of benefits to tax year 2020 (if benefits were received that year), the process required that the prior-year return be adjusted by one of the following methods:

• Refile (if the return was filed electronically
• “Change my Return” via the My Account or Represent a Client portals
• Submission of a T1ADJ Request for Adjustment form

Repayments of these benefits made in 2022 may also be applied to the year the benefits were made using the above methods, but repayments should only be carried back if the deduction is of more benefit in the prior year than in the current year.

Bottom Line: If the benefit is the same for either year, taxpayers may wish to apply the repayment to the prior year now—rather than waiting until they file their 2022 returns next spring—so that they get their refunded taxes paid on the benefits, sooner.

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