Uncertainty among students as tax season approaches

COVID-19 relief benefit claims change attitude students have towards this year’s taxes

The added complications of COVID-19 relief is making students more stressed than usual over tax season. Photo Sheena Macmillan

Tax season may look a little different for some students this year because of the COVID-19 relief benefit claims that were available to them. Generally speaking, most students don’t owe a lot—if anything—in taxes. After claiming relief benefits this past year, however, some students are feeling anxious about the possibility of owing money on their upcoming tax returns.

The Canada Emergency Relief Benefit was made available to employed Canadians that were financially affected by the pandemic. The benefit provided eligible Canadians with $2,000 every four weeks, up to a maximum of 28 weeks. For students, Canada Emergency Student Benefit was made available to those who were unable to find work because of the pandemic. CESB provided $1,250 to students every four weeks, up to a maximum of 16 weeks. These two relief benefits were given to those applicable without being taxed. This is where most of the worry about this upcoming tax season comes from.

For individuals who needed further financial help after the maximum amount was exceeded, Employment Insurance was available. EI differs from COVID-19 emergency relief benefits because it was taxed before given those who claimed it.

“This upcoming tax season I'm pretty stressed out about, just because of the CERB. We're not used to anything like that so the fact that we're going to have to implement that in the taxes is what stresses me out the most,” said Meghan Bouchard, a Concordia political science student.

Bouchard was laid off twice this year due to the pandemic and has been claiming CERB and EI benefits since last March. She feels the government is coming across as uncertain when it comes to how they will tax these benefits. 

“If the government is uncertain then that makes me feel uncertain,” she said.

Bouchard, who normally does her own taxes, has hired tax experts this year to make sure all credits that apply to her will be used to go against her amount owing. She has been saving money in preparation for what she expects to be a large amount to pay back since she has been claiming benefits for almost a year. 

Nicole Gagne, a Concordia commerce student, has also been claiming benefits since last March. When she first started claiming them she worried about the impact it would have on her tax return.

“It was so confusing. Nobody knew what was happening and this has never happened before,” Gagne said. “Everything was new. I've never been on EI before so I didn’t even know where to start.”

“I’ve kind of just gotten to the point where I’m just rolling with the punches. I feel like so many other people are kind of at that point too.” — Nicole Gagne

With all the constant uncertainty about the pandemic and the stress she already deals with  as a student, she said her attitude has since changed. “I've kind of just gotten to the point where I’m just rolling with the punches. I feel like so many other people are kind of at that point too,” she said. “I can’t put the energy to keep worrying about it constantly, we're just so far into it. It’s been a year, you can’t be under that constant stress anymore.”

Although Gagne no longer feels stressed about her own tax return, she does feel an immense amount of confusion and uncertainty coming from the government going into the tax season. “Seeing as [the pandemic is] still going on I just think they don’t even know where to go with it,” she said. “I feel like there's just so much grey area. Nobody really knows what is happening and what they're going to do going forward.”

Jonathan Mirarchi, a Price Waterhouse Cooper tax associate, agrees there is confusion around this tax season but expresses students should not be stressing over their return. “To be empathetic, I understand why people would be stressed with all this tax jargon being thrown around the news, I understand why people feel stressed,” he said. “However, as long as they stay informed and they make the necessary efforts to read up on what's going on [...] they should be fine,” Mirarchi also teaches free personal finance and tax workshops twice a month with the John Molson Accounting Society. 

He mentioned some credits that can be applicable to students and go against taxable income. Aside from students typically falling into the lower tax brackets, there are other benefits that come with being a student. “Luckily, you also have your tuition tax credit that can work against your taxable income, any medical expenses or credits, any donations or contributions to your RRSPs,” said Mirarchi.

Mirarchi emphasized students should not stress over their tax return for multiple reasons. There is a basic personal amount of income that is not taxable, credits that go against taxable income, and EI benefits had already deducted tax amounts.

For now, Mirarchi recommends students gather their documents and make sure they have all of their slips organized to save time and confusion when they do file their return. He recommends seeking out tax professionals if ever you have questions regarding this tax season and to be aware of the credits that apply to you.

“Keep in mind everyone’s a bit confused right, including the ones who collect the taxes, which is the government. So, it's normal to feel a little confused on the situation overall. It’s not out of character, you’re not the only one out there confused,” said Mirarchi.