Report a rent subsidy on your tax return: COVID-19 rent and property support for businesses

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COVID-19 rent and property expense support for businesses



Report the rent subsidy on your tax return

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When to report a rent subsidy on your return

A rent subsidy is considered government assistance and is taxable, unless you are exempt from income tax. This includes rent subsidy amounts you received through the:

  • Canada Emergency Rent Subsidy (CERS)
  • Tourism and Hospitality Recovery Program (THRP)
  • Hardest-Hit Business Recovery Program (HHBRP)

You must report the subsidy on your income tax or information return for the tax year (fiscal period) in which you are considered to have received it.

The rent subsidy is generally considered to have been received on the last day of the claim period it relates to.

For example, if you applied for and received a rent subsidy for claim period 23 (November 21 to December 18, 2021), we would consider you to have received the amount on December 18, 2021, even if you applied for period 23 in 2022 or received your subsidy amount for period 23 in 2022.

How to report a rent subsidy on your return

How you report a rent subsidy on your tax or information return depends on the type of entity you are.

You may be able to elect to reduce your related rent expenses by the amount of government assistance (rent subsidy) you received. Otherwise, you have to include the assistance in your income.

Corporations

Report the amounts of rent subsidy you received for the tax year on both Schedule 1 of your T2 Corporation Income Tax Return (T2SCH1) and the General Index of Financial Information (GIFI).

On the GIFI, include the rent subsidy you received at line 8242.

On Schedule 1 of your T2 Corporation Income Tax Return (T2SCH1):

  • On line 605, include a short description clearly identifying each COVID-19 subsidy you received
    Example: “CERS $15.5K”
  • On the corresponding line 295, enter “0”
  • If you are a member of a partnership, reflect any rent subsidy amount included in the partnership’s income and allocated to you in the amount you enter on line 129, “Income or loss for tax purposes – partnerships”

Related forms and guide

Trusts

Include the total rent subsidy amount you received for the tax year on line 19, “Other income” of your T3 Trust Income Tax and Information Return.

If you are a member of a partnership, you should also enter any rent subsidy amount included in the partnership’s income and allocated to you on line 19.

Related form: T3 Trust Income Tax and Information Return (T3RET)

Partnerships

Report the amounts of rent subsidy the partnership received for the fiscal period on both Schedule 1 of your T5013 (T5013SCH1) and the General Index of Financial Information (GIFI).

On the GIFI, include the rent subsidy the partnership received at line 8242.

On form T5013SCH1, Net Income (Loss) for Income Tax Purposes – Schedule 1:

  • As a member of a partnership, reflect any rent subsidy amount included in the partnership’s income and allocated to you in the amount you enter on line 109, “Income or loss for tax purposes from partnerships”
  • On any of lines 600 to 604, include a short description clearly identifying the total rent subsidy amount the partnership received
    Example: “CERS $15.5K”.
  • On the line 290 to 294 that corresponds to the line used to enter the description, enter “0”

Related forms and guide

Unincorporated businesses

If you are an individual who has received a rent subsidy amount as an eligible entity, you will report the total amount you received on the statement of activities form(s) that apply to your situation.

Sole proprietors (unincorporated, self-employed individuals)

Include the total rent subsidy amount you received for the tax year on line 8230, “Other income” of form T2125, Statement of Business or Professional Activities.

Self-employed farmers

Include the total rent subsidy amount you received for the tax year on line 9600, “Other income” of form T2042, Statement of Farming Activities.

Self-employed fishers

Include the total rent subsidy amount you received for the tax year on line 9600, “Other income” of form T2121, Statement of Fishing Activities.

Partners in a partnership

If you are a partner in a partnership that has to file a partnership information return, the rent subsidy amount included in the partnership’s income and allocated to you will be in the amount at box 114 of your T5013, Statement of Partnership Income slip. Report the rent subsidy amount on the appropriate line of form T2125, form T2042, or form T2121, whichever applies. Do not enter this amount at line 13000 of your T1 Income Tax and Benefit Return.

For more information on completing the statement of activities form that applies to you as a partner in a business, farming, or fishing partnership, see guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Related forms and guide

Tax-exempt entities

If you are an income tax-exempt entity (such as a registered charity or a non-profit organization) that has received a rent subsidy amount as an eligible entity, you may have to report the total amount you received on the information return (if any) that applies to your situation, even though this amount is not taxable to you.

Registered charities

Use the T3010, Registered Charity Information Return to report a rent subsidy amount you received as income.

If you are a registered charity that does not have to complete Schedule 6, you can report rent subsidy amounts you received as income by checking “Yes” at line 4565, “Did the charity receive any revenue from any level of government in Canada?” of Section D and including the total rent subsidy amount you received for the fiscal period on line 4570.

Otherwise, include the total rent subsidy amount you received for the tax year on line 4540, “Total revenue received from federal government” of Schedule 6.

Related form: Registered Charity Information Return (T3010)

Registered Canadian amateur athletic association

There is no particular line on form T2052, Registered Canadian Amateur Athletic Association Information Return, to report the rent subsidy. The financial statements for the fiscal period covered by the return should indicate the different sources of revenue in enough detail to show how funds were spent and invested.

Related form: Registered Canadian Amateur Athletic Association Information Return (T2052)

Other tax-exempt eligible entities

If your organization is required to file the T1044, Non-profit Organization (NPO) Information Return, include the total rent subsidy amount your organization received for the tax year on line 101, “Federal, provincial, and municipal grants and payments” of your NPO Information Return. For more information on whether the organization you represent has to file a NPO Information Return, see guide T4117, Income Tax Guide to the Non-Profit Organization (NPO) Information Return.

Related form and guide

No GST/HST reporting requirements

Rent subsidy amounts you received are not considered taxable supplies.

Do not include these amounts on the GST/HST return.


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Date modified:
2021-12-21