March 20, 2023

How long before I have to pay back overpayments of COVID benefits?

As the global COVID-19 pandemic began, Prime Minister Justin Trudeau unveiled a plan to provide the economy with a $27 billion cash refund.

Many businesses were given subsidies to help them stay afloat, and most Canadians received payments directly into their bank accounts.

But some of these individuals and companies got too much. Today I’ll explain how long taxpayers have to pay back the Canada Revenue Agency and what you need to do to avoid the consequences.

CRA COVID-19 Surcharges

Throughout the COVID-19 pandemic, the Government of Canada worked with the CRA to provide direct payments and benefits to individuals and businesses affected by the health crisis. These included e.g.

  • Canada Emergency Response Benefit (CERB)

  • Canada Recovery Benefit (CRB)

  • Canada Recovery Sickness Benefit (CRSB)

  • Canada Emergency Student Benefit (CESB)

  • Canada Recovery Caregiving Benefit (CRCB)

  • Canada Worker Lockdown Benefit (CWLB)

Some of these benefits were automatically granted to taxpayers based on information obtained from their previous year’s tax returns. Others require taxpayers to fill out a short application. After the pandemic, however, the credit rating agency began to review the payments it made and look for possible errors, excessive payments or outright 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 claimed or received more than what was paid.

If you’ve received a notice from a credit rating agency claiming you owe back overpaid COVID-19 benefits, it may be unclear how long you have to pay it back.

There is currently no set date by which you must repay the CRA.

  • Are you paying back CERB that you have already been taxed on? Here are your options

However, you are encouraged to repay your debt as soon as possible. Alternatively, you can also agree on a payment plan that allows you to repay your debt over time.

If you are unable to repay the debt right away, it is highly recommended that you call the credit bureau at 1-833-253-7616 to see other options.

Ideally, you should make payment arrangements with the CRA before you file your 2022 tax return. If you owe money to the CRA and haven’t paid, the amount you owe may be deducted from your tax returns or any GST/HST credit that would otherwise be due to you.

How do I know if the CRA overpaid my COVID-19 benefit?

The CRA maintains a detailed record of all Canadian taxpayers, including information on the amount they owe and any COVID-19 tax payments made to them.

  • ‘Not fair’: CERB recipients who now have to pay back money share their stories

If you need to repay some of your CRA COVID-19 payments, you should receive a letter in the mail.

This letter will tell you the exact amount you owe the credit rating agency and, more importantly, why you need to pay the amount back. If you have registered your online CRA My Account account, you may have also received an online notification.

How do I pay the credit rating agency back?

The CRA offers taxpayers three ways to repay their COVID payment debt to the CRA:

1. Pay online with your CRA My Account

Paying online is by far the easiest way to pay a credit rating agency. You can see exactly what you owe and pay using your online banking account. Best of all, your payment will be mailed immediately (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, log into your CRA My Account For Individuals account and make the payment through the portal.

2. Pay by post

You can also pay your CRA balance by sending a check or money order (do not send cash) to the “Receiver General of Canada.” The reverse side of the check or money order must include your SIN number and the note “Reimbursement of CERB” (or any applicable benefit such as CRB or CRSB) to ensure that it has been applied to the correct account.

You can mail your payment to the following address:

Processing of income – Repayment of emergency and recovery benefits
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury IS P3A 0C3

3. Pay in person

Alternatively, you can pay the credit rating agency back through your bank or credit union. For this you need to visit your branch in person and talk to a banker. Your bank will then arrange a direct transfer from your account to the credit rating agency.

Drawing up a payment plan

If you are unable to pay the debt in full, you can work out a payment plan with the CRA. You can do this by contacting the credit rating agency directly and speaking with a representative. Due to the high volume of calls, you may have to wait in line for some time.

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