CRA finds that CERB and CESB payments are deemed remuneration for source deduction purposes

CRA found that the source deduction requirements (including graduated rates) under Reg. 102(1) applied to Canada emergency response benefit (CERB) and Canada emergency student benefit (CESB) payments. In this regard, it noted:

  • The payments are governmental financial assistance under s. 56(1)(r), so that they are deemed “remuneration,” and the payer and payees are deemed to be “employer” and “employee,” under the Reg. 100(1) definitions.
  • Although the payees would not be reporting for work, there nonetheless would be a deemed establishment of the deemed employer under Reg. 100(4).

Neal Armstrong. Summaries of 9 July 2020 Internal T.I. 2020-0854701I7 under Reg. 102(1) and Reg. 100(4).