Income tax owing interest relief for low- to middle-income earners

Once individuals have filed their 2020 income tax and benefit return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022. This will give Canadians more time and flexibility to pay if they have an amount owing.

To qualify for targeted interest relief, individuals must have had a total taxable income of $75,000 or less in 2020 and have received income support in 2020 through one or more of the following COVID-19 measures:

• the Canada Emergency Response Benefit (CERB);

• the Canada Emergency Student Benefit (CESB);

• the Canada Recovery Benefit (CRB);

• the Canada Recovery Caregiving Benefit (CRCB);

• the Canada Recovery Sickness Benefit (CRSB);

• Employment Insurance benefits; or

• similar provincial emergency benefits.

The Canada Revenue Agency (CRA) will automatically apply the interest relief measure for individuals who meet these criteria.

Additionally, any CRA-administered credits and benefits normally paid monthly or quarterly, such as the Canada Child Benefit and the goods and services tax/harmonized sales tax credit will not be applied to reduce individuals’ tax debt owing for the 2020 tax year. Canadians are strongly encouraged to file their tax returns by the filing deadline to ensure that their benefit payments continue without interruption.

The Government of Canada recognizes that many Canadians continue to face serious financial impacts as a result of the ongoing pandemic. The interest relief measure will provide an estimated 4.5 million low- and middle-income Canadians with the flexibility required to feel confident about accessing the COVID-19 income support without facing additional stress at tax time.