Tammy Christopher is the chief executive officer of OMISTA Credit Union in New Brunswick. (Photo submitted)
Millions of Canadians impacted by the pandemic have received the Canada Emergency Response Benefit.
But one New Brunswick financial expert says what many people do not realize is the federal benefit is taxable.
“If you could think back for anybody who maybe had a maternity leave or an EI sick leave, when it came time in the spring to do your taxes, you kind of got a little bit of a shock that ‘my goodness, I owe income tax,'” said Tammy Christopher, chief executive officer of OMISTA Credit Union.
Under the benefit, Canadians who lose their income as a result of the COVID-19 pandemic are eligible to receive $2,000 a month.
Christopher said New Brunswickers who receive $8,000 through CERB could owe nearly $2,000 in provincial and federal taxes next year.
She recommends setting money one-quarter of the benefit to cover the taxes but said she knows not everyone can afford to do so.
“Plan ahead because you know that you’re going to have that tax shock come next year. I know it’s difficult to find the extra pennies and dollars in our budgets these days because some have really been affected with job losses,” said Christopher.
“The best thing that you could do is try to save $50 per month. Put that away, tuck that away, much the same as you do for your property taxes. … That’s a much more realistic and much easier pill to swallow, so to say.”
The benefit was initially expected to last 16 weeks but the federal government later extended it for eight more weeks.
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