EI and repayment of benefits at income tax time

What you should know

Whatever the type of benefits you receive, EI payments are taxable income, meaning federal and provincial or territorial taxes, where applicable, are deducted when you receive them.

At the time you file your income tax return, depending on your net income and if you were paid regular benefits, including regular fishing benefits, you may be required to repay some of the EI benefits you received. If your 2017 net income from all sources exceeds $64,125 you will be required to repay 30% of the lesser of:

  • your net income in excess of $64,125; or
  • the total regular benefits, including regular fishing benefits, paid in the taxation year.

Exemption:

You do not have to repay your EI benefits if:

  • your 2017 net income is less than $64,125; or
  • you received less than 1 week of regular or fishing benefits in the preceding 10 taxation years; or
  • you were paid special benefits, i.e. maternity, parental, sickness, compassionate care or parents of critically ill children (PCIC) benefits. However, if you received a combination of regular and special benefits within the same tax year, you may still have to repay a percentage of the regular benefits received. See example 5 for repayment of benefits.

If you received EI regular benefits including regular fishing benefits, that overlap 2 calendar years, you may qualify for the exemption in the 1st taxation year. However, in the following taxation year you would not qualify for the exemption as there would be more than 1 week of regular benefits paid in the preceding 10 years. See example 2 for repayment of benefits.

Examples of repayment of benefits

Example 1

Tax years 2007 to 2016 Tax year 2017
EI claim

30 weeks regular EI paid

You received EI regular benefits in tax year 2017. No EI regular benefits were paid in the 10 years prior to the tax year 2017. Therefore you are exempt from the benefit repayment.

Example 2

Tax years 2006 to 2015 Tax years 2016 and 2017
EI claim

30 weeks regular EI paid:

2 weeks paid in 2016

28 weeks paid in 2017

For tax year 2016, you would be exempt from benefit repayment as you did not receive regular benefits in the preceding 10 tax years.

For tax year 2017, you would not be exempt from benefit repayment as you received more than 1 week of regular benefits in the 10 year period prior to the tax year under consideration, i.e. 2 weeks in 2016.

Example 3

Tax years 2006 to 2015 Tax years 2016 and 2017
EI claim

30 weeks EI paid:

2 weeks sickness paid in 2016

28 weeks regular paid in 2017

You received EI regular benefits in tax year 2017 on a claim that commenced in 2016. There were also 2 weeks sickness benefits paid in tax year 2016. As you received only sickness benefits in the 10 year period prior to the tax year 2017, you are exempt from the benefit repayment provisions for tax year 2017.

Example 4

Tax years 2007 to 2016 Tax year 2017
EI claim

45 weeks of regular benefits paid in 2014
EI claim

20 weeks maternity, parental, sickness, or compassionate care benefits paid

You received EI maternity, parental, sickness, compassionate care or PCIC benefits in tax year 2017. Regular benefits were paid in 2014. Although your net income exceeds $64,125 in 2017, you are exempt from benefit repayment for tax year 2017 as maternity, parental, compassionate care and PCIC benefits are exempted from the benefit repayment provisions.

Example 5

Tax years 2007 to 2016 Tax year 2017
EI claim

45 weeks of regular benefits paid in 2014
EI claim

22 weeks EI paid:

20 weeks regular

2 weeks sickness

You received EI regular and sickness benefits in tax year 2017. Regular benefits were also paid in the ten year period prior to the tax year 2017. Therefore if your net income exceeds $64,125, you will have to repay a percentage of the regular benefits received for tax year 2017, but not the sickness benefits.

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