The Canada Emergency Response Benefit (CERB) was launched by the federal government to help Canadians who have lost their jobs because of COVID-19. It provides temporary income support of $500 per week for up to 16 weeks.
While these funds will be welcome relief for many, the income is taxable and there are no deductions taken at source. This means that you will be taxed on the full amount when you file your 2020 tax return next year. To avoid unexpected taxes owing next tax season, you should consider setting aside a portion of any CERB income, based on your federal and provincial tax rates.
You can also use our tax calculator to quickly estimate your federal and provincial taxes.
To learn more about eligibility and how to apply for CERB, visit the CRA’s website.
As always, if you have any questions, let us know—we’re happy to help!