At the start of the global COVID-19 pandemic, Prime Minister Justin Trudeau unveiled a plan to inject a $27 billion cash stimulus package into the economy.
Many businesses have received grants to help them stay afloat, and most Canadians have received payments sent directly to their bank accounts.
But some of these people and companies were overpaid. Today, I’m going to tell you how much time taxpayers have to reimburse the Canada Revenue Agency and what you need to do to avoid the consequences.
CRA overpayments for COVID-19
Throughout the COVID-19 pandemic, the Government of Canada has worked with the CRA to issue direct payments and benefits to individuals and businesses affected by the health crisis. These included:
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Canada Emergency Response Benefit (CERB)
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Canada Recovery Benefit (CCP)
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Canada Recovery Sickness Benefit (CRSB)
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Canada Emergency Student Benefit (CESB)
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Canada Recovery Caregiver Benefit (CRCB)
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Canada’s Lockdown Workers Benefit (CWLB)
Some of these benefits were granted automatically to taxpayers based on information obtained from their previous year’s tax returns. Others required taxpayers to complete a brief application. After the pandemic, however, the CRA began auditing the payments it issued, looking for errors, overpayments, or instances of direct taxpayer fraud.
How long do I have to repay the CRA COVID-19 overpayment?
In early 2022, the CRA began sending letters and notices to taxpayers who requested or received more than they were owed.
If you received a notice from the CRA that you owe money for an overpayment of your COVID-19 benefits, you may not know how long you have to pay it back.
Currently, there is no set date by which you must repay the ARC.
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However, we encourage you to repay the amount you owe as soon as possible. Alternatively, you can also arrange a payment plan, which allows you to pay off your debt over time.
If you are unable to repay the debt immediately, it is strongly recommended that you call the CRA at 1-833-253-7616 to see what your other options are.
Ideally, you should make payment arrangements with the CRA before you file your 2022 tax returns. If you owe the CRA money and you haven’t paid, the amount you owe may be deducted from your income tax returns or any GST/HST tax credit that would otherwise be paid to you.
How do I know if the CRA overpaid my COVID-19 benefit?
The CRA maintains detailed records of all Canadian taxpayers, along with data on how much they owe and any COVID-19 related tax payments made to them.
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If you need to repay some of your COVID-19 payments from CRA, you should receive a letter in the mail.
This letter will detail the exact amount you owe the CRA and, most importantly, why you need to repay the amount. If you registered your CRA My Account online, you may also have received an online notification.
How can I reimburse the ARC?
The CRA offers three ways for taxpayers to repay their COVID-related payment debt to the CRA:
1. Pay online with your My CRA Account
Paying online is by far the easiest way to pay ARC. You will be able to see exactly what you owe and pay using your online banking account. Best of all, your payment will be posted instantly (although it may take a few days to process), which should prevent the CRA from sending any more threatening letters.
To pay your balance online, simply log in to CRA My Account for Individuals and you will be able to make a payment through the portal.
2. Pay by mail
You can also pay your CRA balance by mailing a check or money order (do not send cash) to the “Receiver General for Canada”. The check or money order should also have your SIN number along with the memo, “CERB refund” (or whatever your applicable benefit, such as CRB or CRSB) written on the back to ensure it is applied to the correct account.
You can send your payment to the following address:
Income Processing – Reimbursement of Emergency and Recovery Benefits
Sudbury Tax Center
1050 Notre Dame Avenue
Sudbury ON P3A 0C3
3. Pay in person
Alternatively, you can repay the ARC through your bank or credit union. To do this, you will need to visit your branch in person and speak to a banker. Your bank will then arrange a direct transfer from your account to CRA.
Setting up a payment plan
If you are unable to pay the full amount you owe, you can work with the CRA to establish a payment plan. To do this, you will need to contact the CRA directly and speak to an agent. Due to the high call volume, you may have to wait in line for some time.
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