CRA Wants Your CERB Back... What Now?

If you’re reading this, chances are you got a letter from the CRA saying you owe them money, maybe even a lot of money, because you “weren’t eligible” for CERB.

I get emails about this every month for the last two years. Someone gets a notice out of nowhere. No real explanation. No breakdown of how they calculated it. Just a short message that says:

You owe $13,500. Pay us back.

It’s happening to friends, family, and clients across Canada. I don't blame CRA. They have millions of files, and they send out general letters to see what sticks and who will simply just pay back their CERB if they know they never qualified in the first place. CRA is playing the odds. It's a smart move.

What Triggers a CERB Clawback?

Here’s the main reason CRA asks people to repay CERB:

‍They say your income was too high.

But how they define income is what catches most people off guard.

A few common examples:

• You were self-employed, and CRA used your gross income, not your net
• You had seasonal or irregular income, and CRA didn't account for fluctuations
• You received another benefit (like EI) that overlapped with CERB
• Your business had expenses, but CRA didn’t consider them in their math
• You filed late, or amended a return, and now CRA is reassessing you

Real Client Story from Ottawa about CERB

One of my clients received a letter out of the blue this year. CRA said he owed $13,500. No detailed paperwork. No explanation. Just a short note after a “review.”

The thing is, his books were clean. He had support documents. But he ignored the CERB letters and phone calls. So CRA assessed as if he never answered them.

‍

Ignoring CRA is never a good idea.

‍

He ran a small seasonal business and barely scraped by during the pandemic. We appealed it. We broke down the math, showed CRA their own assumptions were unrealistic, and defended the client using their own internal policies.

The file is still open, but now they’re listening.

What Are Your Options?

If you’ve received a CERB repayment letter, you’re not powerless. You’ve got options:

1. Ask for a Reconsideration

CRA actually allows you to request a second look. It’s called a CERB Reconsideration. You can explain your case, provide extra documents, and ask them to reassess.

Link: CRA – CERB Repayment

2. Dispute the Income Numbers

Especially if you were self-employed, the numbers they’re using might be wrong. CRA sometimes calculates based on gross income, not factoring in expenses. That’s not how eligibility should be assessed. You can push back.

3. You Don’t Have to Pay Right Away

Even if CRA sends you a bill, it doesn’t mean you need to pay immediately, especially if you’re filing a dispute. In many cases, collections are paused during the appeal process.

What If You Can’t Afford to Repay?

You’re not alone.

Some people are exploring bankruptcy or consumer proposals, but before you go that far, talk to someone who knows CRA’s playbook. You can also set up a payment plan with CRA.

In many cases, we’ve helped reduce or cancel these repayments entirely by pointing out flaws in how CRA handled the audit and proving that a client was eligible.

If You’re Thinking: “I Don’t Even Know Where to Start”

Start here:

• Pull your 2019 and/or 2020 tax return
• Check your income
• Gather proof of income and expenses (invoices, bank statements)
• Look at the months you received CERB
• Write down your story, what actually happened during that time
• Check to verify your income on your bank statements

Then, decide whether you’re ready to handle it on your own, or want someone to represent you. You don’t have to fight this alone, but the sooner you respond, the more options you’ll have.

What Reddit Is Saying

This isn’t a rare situation. These posts are from people going through the same thing:

• “CERB Reconsideration Finally Reversed by CRA”
• “CRA Says to Repay CERB, No Explanation”
• “Got a Letter Asking to Repay CERB”

I read these all the time. They get recycled all over reddit from thousands of people receiving the same letters.

Final Thoughts

People are being hit with CERB repayment letters across the country.

If CRA says you owe, don’t panic. Don’t rush to pay it. Don’t ignore it either.

You’re allowed to ask for clarity. You’re allowed to disagree. You’re allowed to appeal.

And if you’re stuck, send me a message. I’ve worked at CRA. I know how they think. More importantly, I know how to follow their processes and steps.

This is not legal advice. This is my professional opinion based on real-life files. Always speak to someone qualified before making big decisions.

‍

--

This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194

‍

‍