ARCHIVED - Employment Insurance and Repayment of Benefits at Income Tax Time - Year 2008

The following information is out of date.

What you should know

Whatever the type of benefits you receive, EI payments are taxable income, meaning federal and provincial or territorial taxes, where applicable, are deducted when you receive them.

At the time you file your income tax return, depending on your net income and if you were paid regular benefits, including regular fishing benefits, you may be required to repay some of the EI benefits you received. If your 2008 net income from all sources exceeds $51,375 you will be required to repay 30% of the lesser of:

• your net income in excess of $51,375; or
• the total regular benefits, including regular fishing benefits, paid in the taxation year.

Exemption :

You do not have to repay your EI benefits if:

• your 2008 net income is less than $51,375; or
• you received less than 1 week of regular or fishing benefits in the preceding 10 taxation years; or
• you were paid special benefits, i.e. maternity, parental, sickness or compassionate care benefits. However, if you received a combination of regular and special benefits within the same tax year, you may still have to repay a percentage of the regular benefits received. See example 5.

If you received EI regular benefits that overlap 2 calendar years, you may qualify for the exemption in the 1^st taxation year. However, in the following taxation year you would not qualify for the exemption as there would be more than 1 week of regular benefits paid in the preceding 10 years. See example 2.

Examples of repayment of benefits

Example 1

Tax years 1998 to 2007	Tax year 2008
	EI claim 30 weeks regular EI paid
You received EI regular benefits in tax year 2008. No EI regular benefits were paid in the 10 years prior to the tax year 2008. Therefore you are exempt from the benefit repayment.

Example 2

Tax years 1998 to 2006	Tax years 2007 and 2008
	EI claim 30 weeks regular EI paid: 2 weeks paid in 2007 28 weeks paid in 2008
For tax year 2007, you would be exempt from benefit repayment as you did not receive regular benefits in the preceding 10 tax years. For tax year 2008, you would not be exempt from benefit repayment as you received more than 1 week of regular benefits in the 10 year period prior to the tax year under consideration, i.e. 2 weeks in 2007.

Example 3

Tax years 1998 to 2006	Tax years 2007 and 2008
	EI claim 30 weeks EI paid: 2 weeks sickness paid in 2007 28 weeks regular paid in 2008
You received EI regular benefits in tax year 2008 on a claim that commenced in 2007. There were also 2 weeks sickness benefits paid in tax year 2007. As you received only sickness benefits in the 10 year period prior to the tax year 2008, you are exempt from the benefit repayment provisions for tax year 2008.

Example 4

Tax years 1998 to 2007	Tax year 2008
EI claim 45 weeks of regular benefits paid in 2005	EI claim 20 weeks maternity, parental, sickness, or compassionate care benefits paid
You received EI maternity, parental, sickness or compassionate care benefits in tax year 2008. Regular benefits were paid in 2005. Although your net income exceeds $51,375 in 2008, you are exempt from benefit repayment for tax year 2008 as maternity, parental, sickness or compassionate care benefits are exempted from the benefit repayment provisions.

Example 5

Tax years 1998 to 2007>	Tax year 2008
EI claim 45 weeks of regular benefits paid in 2005	EI claim 22 weeks EI paid: 20 weeks regular 2 weeks sickness
You received EI regular and sickness benefits in tax year 2008. Regular benefits were also paid in the 10 year period prior to the tax year 2008. Therefore if your net income exceeds $51,375 you will have to repay a percentage of the regular benefits received for tax year 2008, but not the sickness benefits.