Canadian hosts claiming CERB during Covid, facing CRA issues

[Paulette23]

Hello fellow Canadian hosts,

I'm wondering if others are facing the same issue: I claimed and received CERB and now CRB to compensate for my Airbnb income virtually drying up. I met all the criteria, including 'self employment' income of a minimum of $5000 in 2019, which I reported on my 2019 tax return.

On Friday I received a generic email stating that, according to their records, I didn't qualify and it listed options for repayment.

I spent a great deal of time on the phone seeking clarification and was advised to proactively submit proof of Airbnb income.

However, one agent, who conferred with his manager, said that, although there was no final decision, my Airbnb income doesn't appear to qualify for self employment, but rather as rental income arising from an investment.

I rent two bedrooms in my own home, my primary residence, so didn't buy investment property specifically to obtain rental income. I've owned the house since 2005 and only started hosting in 2017.

Maybe the fault lies with the way I reported the income, i.e. as rental income rather than self employment which seemed quite onerous and complicated. 

I'd appreciate any thoughts, feedback from other hosts in Canada.

Thanks!

Paulette

[Nancy1456]

Hi Bella and Vincent, my situation is like yours.  We do the same with our residence.

I did apply for CERB and received only the amount I would have lost that year. 

Was wondering how things ended for you?

Once again CRA is asking me for proof of the $5000.  I had sent it in 2 years ago when they asked for that info  and never heard from them until now.

I assume, from others, that I will be sending the money back.  

I also wonder how many Airbnb-ers, who received CERB got to keep their monies.

It seems so unfair on so many levels. My neighbors, who both work, applied and received CERB?? CRA employees for heavens sake applied and received it!!! 

New Zealand and other countries considers Airbnb as self employment.  

From "lovethemaldives," quote, "Is Airbnb hosting considered a
business?
Yes, it's a commercial activity because
it involves renting out a short-term
rental property regularly and getting
income from it. So Airbnb hosts are
considered self-employed business
owners."
Sorry, I didn't mean this message to be a novel...LOL!...but I feel we have been treated unfairly and the Canadian laws need to be changed.

Thanks for any  info you may have.

Warm regards!! Nancy

[Lawrene0]

As you reported it on your tax return as rental income, @Paulette23 , then it is rental income in the eyes of the government. You stated, and signed, that it was rental income. 

I know it is an awful blow. You had no way of knowing last year that it would disqualify you for government assistance you never imagined you would need. 

As you reported it on the wrong line and with the wrong form, you could try filing an amended return. Doubt it will do anything but flag your account, but you might ask that agent. 

It's something, anyway.

[Paulette23]

@Lawrene0 Thanks so much, that's helpful.

Last year was only the second time I had to report Airbnb income so I replicated what I'd done for my 2018 return, i.e. report it as rental income instead of self-employed. The latter status seemed suited for independent consultants, contractors and the like, i.e. those who are incorporated, as opposed to someone renting out a couple of rooms in their home. 

That may have been the error on my part which I hope to clarify and possibly remedy.

Without wishing to pry, I assume that you report your Airbnb income as self-employment income?

Thanks so much again for your input.

[Lawrene0]

Mine isn't the same setup as your rooms in the house, @Paulette23 . I apologize for the "wrong" line -- it was wrong only in that it didn't work for CERB, which didn't exist when you were making that rental vs business reporting decision. No, self-employed income is not just for the incorporated (tax returns for corporations are different altogether), but in your case, a couple of rooms in the house, canada.ca recommends the T776, so you were right.

But right does you no good. It's still rental income.  

Don't try the amended return after all. Maybe your member of parliament can help?

[Paulette23]

I'll call CRA tomorrow and get some clarification before uploading proof of Airbnb income, bank statements etc.

No point going to that bother if ultimately they still point to my reporting on a tax return line that cancels my eligibility.

[Bella-And-Vincent0]

we did go back and changed the lines and reported it as self employment income and it didn't make any difference in my second review.  i was still told that i need to proof $5000 only from the cleaning fees.  i am going to federal court to appeal, can't fill out forms for now, ridiculous.  Bella 

[Peter-and-Elaine0]

Paulette 23, I’m interested in this conversation and wondering If you made any further progress with CRA. 

[Paulette23]

@Peter-and-Elaine0  Feel free to call me: **.

**[Phone number hidden due to safety reasons - Community Center Guidelines]

[Peter-and-Elaine0]

Thanks, will call this evening around 7:30 pm if convenient for you. Or we can call tomorrow.  Let me know what’s best for you. 
Elaine 

[Paulette23]

@Peter-and-Elaine0  This evening is fine. Speak soon.

[M199]

@Paulette23 

Hi All Canadians!

I have over 25 years  of payroll experience, domestic all provinces and globally.  So I know a little bit about CRA rules and regulations. 

Renting your space on Airbnb or any other platform is considered Rental Income  not Self Employment.   I do not under Canadian taxation rules qualify for CERB or other "benefits".

My recommendation is that if you are concerned, you should probably contact a tax advisor.

Sorry🙁

[Nancy1456]

Hi fellow Canadian Airbnb-ers, been following others regarding CERB repayments.  I, too, received a letter from CRA to repay my CERB benefits.  I decided to leave my paid career to be self employed to have the "freedom" to be with my elderly mother so she could stay in her own home and to help with my grandchildren so they didn't need to go to a daycare.  So airbnb-ing my home was the perfect solution, a short term solution to help pay for day to day expenses, not a long term rental situation.  At best, being in a resort town, it only rents during the summer months.

I see now the gov't is allowing other CERB recipients that had to repay to keep their CERB payments.  Do any of you have any updates to your stories.  I am going  to write to our gov't today and hope to resolve this issue.  Thanks for any input.  

[Kerem12]

Did you by any chance have response? Would be happy to hear what happened! In the same boat myself!

[Kerem12]

Just wanted to follow and follow up with @Paulette23  - sent you a dm

[Ricardo1348]

In Canada. No rental income or self-employed (due to rentals) qualify for CERB. I tried both ways and rejected. I spoke for hours with CRA and CERB. Government decides you cannot make money and you cannot get CERB. Of course whoever makes the law, always make money. Choose your vote well next elections.