Reminder on tax treatment of CEBA loans

With the opening of the expanded CEBA program, we want to remind members that the forgivable portion of CEBA loans is taxed in the taxation year in which the loan was received. This is discussed more in the October 28 posting to this page entitled “Highlights from the CRA’s recent webinar.”

Under the CEBA program expansion, an additional $20,000 can be advanced, of which $10,000 is potentially forgivable. With the end of the year fast approaching, it may make sense, if possible, to ensure that the additional loan amount is received in early January rather than December. For those with a calendar tax year, this should mean that the additional $10,000 forgivable amount is taxed in 2021 rather than 2020.