As we move on from the worst years of the pandemic, you may have received a notification of tax debt from the CRA. What does this mean, and why has this happened? In 2020, the CERB was made available to Canadians in need. Due to the pressure of the pandemic, you could submit your eligibility for the CERB without meeting its qualifications. Now the CRA is going back to determine eligibility and sending out notices to those who didn’t qualify.
CERB’s requirements weren’t precise, leading to many instances of people receiving it without meeting the qualifications. Eligibility was determined around what your income was before COVID-19 as well as during it. It excluded disability benefits, student loans, family support, social assistance payments, and income from investments. That’s quite a list! Moreover, self-employed people could apply if their gross income was over $5000, even if the net income was less.
With such a confusing list of qualifications, it’s no wonder many people mistakenly applied and were overpaid.
Don’t panic if you’ve received this notification from the CRA. First, you should file your 2020 tax return to determine how much you owe. Then you can contact the CRA and establish a payment schedule to pay back the tax debt. It’s important to know that the CRA typically charges 5% interest on remaining balances, with additional penalties if the return is late.
What if you can’t repay your tax debt? Even then, you still have options. If you cannot pay it back because of circumstances out of your control, such as an illness or a natural disaster costing you your income, you can file for taxpayer relief. A successful application can assist with reducing or eliminating the penalties and interest on your tax debt. Goldhar Consulting and Tax Services have the expertise to assist with the taxpayer relief application. Call today for a consultation at 1-877-829-2431, email firstname.lastname@example.org, or visit our website at www.goldhartaxsolutions.ca.
However, if the debt burden in any amount is still overwhelming because of added credit cards, lines of credit, overdrafts, or payday loans, consider a Consumer Proposal. Consumer Proposals can include amounts owing to the Canada Revenue Agency and other debts. A Consumer Proposal is only offered by a Licensed Insolvency Trustee and can reduce your debts – including principal amounts owing – by more than half the original amount.
Your first step should always be to talk to a Licensed Insolvency Trustee for their advice on how to Shed the Debt. You can book a free consultation with Goldhar & Associates Ltd., Licensed Insolvency Trustee, at any time. Just call 1-855-541-5114, send an email to email@example.com, or visit our website: www.shedthedebt.ca.
Our financial professionals and experts will be happy to help make the CERB repayment process simple and stress-free.