Employment Insurance (EI) and Repayment of Benefits at Income Tax Time - Year 2010

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What you should know
Examples of repayment of benefits

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 2010 net income from all sources exceeds $54,000 you will be required to repay 30% of the lesser of:

• your net income in excess of $54,000; 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 2010 net income is less than $54,000; 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 1st 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.

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Examples of repayment of benefits 

Example 1
Tax years 2000 to 2009	Tax year 2010
	EI claim 30 weeks regular EI paid
You received EI regular benefits in tax year 2010. No EI regular benefits were paid in the 10 years prior to the tax year 2010. Therefore you are exempt from the benefit repayment.

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Example 2
Tax years 2000 to 2008	Tax years 2009 and 2010
	EI claim 30 weeks regular EI paid: 2 weeks paid in 2009 28 weeks paid in 2010
For tax year 2009, you would be exempt from benefit repayment as you did not receive regular benefits in the preceding 10 tax years. For tax year 2010, 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 2009.

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Example 3
Tax years 2000 to 2008	Tax years 2009 and 2010
	EI claim 30 weeks EI paid: 2 weeks sickness paid in 2009 28 weeks regular paid in 2010
You received EI regular benefits in tax year 2010 on a claim that commenced in 2009. There were also 2 weeks sickness benefits paid in tax year 2009. As you received only sickness benefits in the 10 year period prior to the tax year 2010, you are exempt from the benefit repayment provisions for tax year 2010.

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Example 4
Tax years 2000 to 2009	Tax year 2010
EI claim 45 weeks of regular benefits paid in 2007	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 2010. Regular benefits were paid in 2007. Although your net income exceeds $54,000 in 2010, you are exempt from benefit repayment for tax year 2010 as maternity, parental, sickness or compassionate care benefits are exempted from the benefit repayment provisions.

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Example 5
Tax years 2000 to 2009	Tax year 2010
EI claim 45 weeks of regular benefits paid in 2007	EI claim 22 weeks EI paid: 20 weeks regular  2 weeks sickness
You received EI regular and sickness benefits in tax year 2010. Regular benefits were also paid in the 10 year period prior to the tax year 2010. Therefore if your net income exceeds $54,000, you will have to repay a percentage of the regular benefits received for tax year 2010, but not the sickness benefits.