Seniors: Tips to help you this tax season!
January 14, 2021
Canada Revenue Agency
The Canada Revenue Agency (CRA) understands that the COVID-19 pandemic may have affected the usual ways seniors manage their taxes. Here are some tips to help prevent disruptions to your tax and benefit affairs, as well as to help you when completing your income tax and benefit return in order to ensure you receive all the benefits and credits to which you are entitled!
Sign up for direct deposit and file online to reduce delays
The CRA encourages you to sign up for direct deposit, file your income tax and benefit return online, and update your address and personal information, to get any refund faster and avoid delays. The CRA also encourages you to sign up for My Account, the fastest and easiest way to view and manage your tax and benefit information. The CRA’s Get Ready page has information on online filing, deadlines, and other helpful links.
If you filed your return on paper last year, the CRA will automatically send you an income tax and benefit package by mail, so there is no need to leave your home to get one, reducing your potential exposure to COVID-19. File your return soon after you receive your package to get any refund for which you may be eligible for, and to help ensure that your benefit and credit payments are not interrupted.
How COVID-19 benefits affect your return
If you received the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), or Canada Recovery Caregiving Benefit (CRCB) payments, these are considered taxable income, and you will have to enter on your return the total of the amounts you received. You will receive a T4A (for benefits issued by the CRA) and/or a T4E (for benefits issued by Service Canada) tax slip in the mail with the information you need for your return. You can view tax slips online as of February in My Account. Residents of Quebec will receive both a T4A and RL-1 slip.
In addition, you may owe tax when filing your return. This will depend on your personal circumstances, and the type of COVID-19 benefits you received:
- If you received the CERB or CESB, no tax was withheld when payments were issued, and you may owe tax when filing your 2020 tax return.
- If you received the CRB, CRSB, or CRCB, 10% tax was withheld at source. However, this may not be all the tax you need to pay. When you complete your personal income tax return, you may need to pay more (or less), depending on how much income you earned in 2020.
We recognize that for some individuals, repaying these benefits could present significant financial hardship. For this reason, payment arrangement parameters have been expanded to give Canadians more time and flexibility to repay based on their individual financial situations.
There may be other impacts to filing your tax return that are specific to the COVID-19 benefit you received, or if you are a resident in Quebec.
Get free tax help
If you have a modest income and a simple tax situation, volunteers near you may be able to complete your return for free. This year, to reduce the spread of COVID-19, volunteers may be able to complete and file your return by videoconference or phone, or through a document drop-off arrangement. To determine if you’re eligible and to find a tax clinic near you, go to canada.ca/taxes-help.
You can also quickly and securely file your return online. The CRA has a list of NETFILE certified tax software products that are easy to use, fast, and secure. Some of which are free!
Protecting you from scams and fraud
We recognize that there is a significant financial and emotional effect on victims of scams, fraud, and identity theft and we are doing our best to protect Canadians and ensure they receive the benefits to which they are entitled.
It is important to protect yourself from scams, and to know when and how the CRA might contact you.
As a fraud prevention measure you can sign up for email notifications from the CRA to receive a notification when you have new mail to view in My Account and when important personal information such as your address or direct deposit information is changed on CRA records. You can register to receive email notifications in My Account or the MyCRA or MyBenefits CRA web apps.
The scams and fraud webpage provides more information about how to protect yourself from fraud.
Get benefits, credits, and claim other expenses
As a senior, you may be eligible for benefits and credits when you file your return, such as the:
- goods and services tax / harmonized sales tax credit
- related provincial or territorial benefits and credits
If you owe money this year, you may be able to claim credits that will lower what you owe at tax time. For example, you may be able to claim the:
- Canada caregiver credit
- disability tax credit
- medical expense tax credit
- home accessibility tax credit
- age credit
- pension income credit
Also, you may be able to take advantage of pension income splitting.
Do you receive the guaranteed income supplement? The supplement is a monthly benefit for old age security pension recipients who have low income and are living in Canada. If you receive the supplement, by filing your return on time you will avoid any delay in the payments for which you are eligible.
If you’re a resident of Alberta, Saskatchewan, Manitoba, or Ontario, you may be eligible for the climate action incentive payment when you file your 2020 return. You could receive a larger payment if you live in a small or rural community. The incentive will first lower the taxes you might owe, then create or increase your refund.
Making sure you claim potential benefits and credits is important. It helps you pay for what you need, and puts more money in your pocket. Do your homework on the benefits and credits you may be eligible to receive so you don’t miss out!
For more information, visit:
Canada Revenue Agency
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