Tax time can be stressful enough, but for many British Columbians COVID-19 has made this tax season even more unpleasant.
That’s the situation New Westminster resident Tegan Panoulias is in, after finding herself with a surprise tax bill of $850.
The veterinary clinic assistant, who is medically vulnerable, had to take three months off work last year during the first wave of the pandemic.
Read more:
‘Biggest financial crunch I’ve ever faced’: A year living on COVID-19 recovery benefits
Like millions of other Canadians, Panoulias received the Canada Emergency Response Benefit (CERB) — COVID relief payments that were taxable.
But she didn’t expect it to result in such a hefty amount owing at the end of the year.
“When I went and did my taxes, I was told I owe a huge amount … and with me being the only one working, I can’t see a way to pay this off,” she said.
“I would appreciate a little bit of leniency on it, you know, understand that there’s a lot of people out of work right now, there’s a lot of people that are struggling with rent, bills, medications.”
Panoulias is not alone in finding this tax season a particular struggle.
A recent survey from IG Wealth Management found CERB or other COVID-19 relief benefits would have an effect on 45 per cent of Canadians’ taxes this year.
Aurèle Courcelles, assistant vice-president of tax and estate planning with IG, told Global News many of those people will find themselves in a situation like Panoulias’.
Read more:
COVID-19 income aid could cost Canadians at tax time, experts say
“Positions where they have income that they received last year, where they needed that income to make their ends meet, didn’t have enough money to set aside, and now they’re filing their tax return, including the income,” he said.
“And unlike a salary where they’re used to having taxes withheld at source, now they have to pay taxes when they file their return, and it could be hundreds or thousands of dollars, and they may find themselves without that money.”
The survey found other tax headaches for Canadians this year.
Another 46 per cent said they’d be making claims related to working from home, while more than a quarter said they’ll have to account for taking on a part-time job in their filings.
Just a third said they were strongly confident in their understanding of the tax impacts of the changes.
While filing may be more complicated this year for many Canadians, Courcelles said there is a silver lining for people in Panoulias’ position.
Read more:
Repaid CERB wrongly listed as taxable income on some tax slips: CRA
The federal government implemented tax changes this year allowing people who received COVID-19 relief and earned less than $75,000 in 2020 to defer payment of taxes owing to April 2022, without racking up any interest.
But they’ll still need to get the paperwork filed this month, he said.
“Don’t get me wrong, you still want to file your taxes by April 30, 2021, because if you owe the government money and you don’t file, they’re going to charge you a penalty,” he said.
That’s good news for Panoulias, but still cold comfort amid an unexpected tax bill on an already difficult year.
“I’ve got to find this money now,” she said.
“CERB was a trap is how I feel.”
