For clients who receive a T4A slip for Covid-19 benefits in 2022, the Canada Revenue Agency issued a reminder that these benefits are taxable and that taxpayers should notify the agency if amounts on the slips are incorrect.

Covid-19 benefit payments “are taxable, and you need the information on your T4A slip when filing your income tax and benefit return,” the agency said in a release on Thursday. “You will need to enter the total amount of benefit payments you received and any tax that was withheld.”

The T4A amounts to report on the tax return are:

  • Box 200, provincial / territorial Covid-19 financial assistance payments
  • Box 201, repayment of Covid-19 financial assistance
  • Box 202, Canada Recovery Benefit
  • Box 203, Canada Recovery Sickness Benefit
  • Box 204, Canada Recovery Caregiving Benefit
  • Box 211, Canada Worker Lockdown Benefit

The amount in Box 201 of the federal T4A slip can be claimed as a deduction on the 2022 return, the return for the year that the benefit was received (2020 or 2021), or split between the 2022 return and the return for the year that the benefit was received, the CRA said.

If a taxpayer wants to claim a repayment amount on their 2020 or 2021 return but the CRA already issued a notice of assessment, the taxpayer can use new form T1B, Request to Deduct Federal Covid-19 Benefits Repayment in a Prior Year, when filing their 2022 return. By using T1B, the taxpayer can claim a deduction in a previous tax year without requesting a separate reassessment to their 2020 or 2021 return, the CRA said.

Errors on a T4A slip, such as Covid-19 benefit amounts that fail to reflect repayments, should be reported to the CRA “right away,” it said.

The CRA also encouraged taxpayers to file by deadline even if they’re waiting for the CRA to resolve an issue with a T4A to “ensure that there are no interruptions to your benefit or credit payments and that you avoid late-filing penalties.”

Taxpayers can file using the information they have available to estimate the benefit amount and any income tax withheld from Covid-19 benefit payments.

“If needed, the CRA will correct the information and send you an amended or cancelled T4A slip,” the release said. “If you receive an amended or cancelled T4A slip, you can request changes to your return.”

T4A slips will be mailed by the end February. (Quebec residents will receive a T4A slip and an RL-1 slip.) T4A slips for Covid-19 benefits will also be available online through My Account and when using the auto-fill service in certified tax-filing software.