With the upheaval caused by the COVID-19 pandemic, including job losses, the widespread need for government assistance, the switch to working from home, and recommendations against travel, many northerners have questions about the implications all of this could have on their income taxes.
Yellowknife-based tax consultant Andy Wong appeared on CBC's Trail's End earlier this week to answer listeners' questions about their 2020 income tax returns.
The conversation has been edited for clarity and length.
Q: There are some new boxes on people's T4s this year. What are those for?
Those boxes, 57, 58, 59 and 60, they are on the bottom of the T4 slip. They are for the employer to tell CRA (the Canada Revenue Agency) what your income was during the CERB (Canada Emergency Response Benefit) period (between March 16 and Sept. 26, 2020), which is not for you to think about. It's for the CRA to process and to follow up on.
Q: For people who were eligible for CERB, what do they need to know for this tax season?
Really not much ... because if you had applied for CERB in any period, you will get what's called a T4A slip. It will say how much you received from CERB. You put that on the tax return. That's all. It's just one extra tax slip.
Q: What about those folks who claimed CERB, but were not eligible for it?
This is where it can get complicated. In order to qualify for CERB, you must have lost your employment (or were unable to work), or your business must have been affected, because of COVID.
(Those that didn't qualify but received CERB) will get a letter from the CRA that says you don't qualify, give it back. It's interest free. So I guess you can take all of 2021 to pay it back, or pay it back as soon as you can.
So let's say you're a pensioner and you're kind of getting enough, but not really enough, and you heard that all you have to do is phone into a toll-free number, answer a couple of questions, and voilà, three days later, actually, less than that, the cheque's in the bank account.
Could anyone have done it? Certainly they could have. But in a situation like this, it's very easy for the CRA to pick you out, because the CRA will look at your tax returns from 2019. The information is all there in the system.
Q: What's the best way to get in touch with the CRA?
Forget calling the CRA on the 1-800 toll-free line. That one is the national helpline.
There is a dedicated phone helpline for the territories. It's 1-866-426-1527.
Q: Is money received for medical travel or escorting someone for medical travel taxable income this year?
No. It never has been, and I am not aware that it is taxable for 2020.
Q: Does it really matter if you don't have all of your travel receipts, particularly for box 32, the employer travel benefit?
I would say, if you took a trip, and you know what those expenses are, claim them. If you don't claim them, you get nothing.
Now, if you claim the trips and in fact you end up being picked by the CRA for a review, you're going to have to explain to the CRA why you have missing receipts and basically, tell the story.
Q: We rented an apartment for the mandatory two-week self-isolation period when we came back to N.W.T. from the United States. We are wondering if any of those quarantine expenses will be deductible.
What you can claim are trip expenses, and obviously, the trip includes the stop at the quarantine location. So I would say yes, the expense of quarantine should count because you're not back at home yet.
Q: Employees who are required to work from home, can we claim a certain amount, say, for power that the employer would be paying for, or for equipment such as our personal laptop?
If you are required to work from home, you are allowed, essentially, to claim $2 per working day, and you don't need receipts for that.
Now, it's up to only 200 days in 2020, so that's $400 maximum. No receipts, no questions asked. The form you use is called T777.