Employment Insurance (EI) and Repayment of benefits at income tax time

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, where applicable, taxes 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 or all of the EI benefits you received. If your net income from all sources exceeds $48,750 you will be required to repay 30% of the lesser of:

your net income in excess of $48,750; 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 net income is less than $48,750; or
If you received less than 1 week of regular or fishing benefits in the preceding 10 taxation years, or since June 30, 1996; or
If 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.

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Examples of repayment of benefits

**Example 1**
Tax years 1996 to 2002	Tax year 2003	Tax year 2004	Tax year 2005
			EI claim 30 weeks regular EI paid $9,000
You received EI regular benefits in tax year 2005. No EI regular benefits were paid in the 10 years prior to the tax year 2005. Therefore you are exempt from the benefit repayment.

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**Example 2**
Tax years 1996 to 2002	Tax year 2003	Tax year 2004	Tax year 2005
		EI claim 30 weeks regular EI paid: 2 weeks paid in 2004, $600 28 weeks paid in 2005, $8,400
For tax year 2004, you would be exempt from benefit repayment as you received less than 1 week of regular benefits in the preceding 10 tax years. For tax year 2005, 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 2004.

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**Example 3**
Tax years 1996 to 2002	Tax year 2003	Tax year 2004	Tax year 2005
		EI claim 30 weeks EI paid: 2 weeks sickness paid in 2004, $600 28 weeks regular paid in 2005, $8,400
You received EI regular benefits in tax year 2005 on a claim that commenced in 2004. There were also 2 weeks sickness benefits paid in tax year 2004. As you received only sickness benefits in the 10 year period prior to the tax year 2005, you are exempt from the benefit repayment for tax year 2005.

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**Example 4**
Tax years 1996 to 2001	Tax year 2002	Tax year 2003	Tax year 2004	Tax year 2005
	EI claim 45 weeks of regular benefits paid			EI claim 20 weeks maternity, parental, sickness, or compassionate care benefits paid, $9,000
You received EI maternity, parental, sickness or compassionate care benefits in tax year 2005. Regular benefits were paid in 2002. Although your net income exceeds $48,750 in 2005, you are exempt from benefit repayment for tax year 2005 as maternity, parental, sickness or compassionate care benefits are exempted from the benefit repayment.

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**Example 5**
Tax years 1996 to 2001	Tax year 2002	Tax year 2003	Tax year 2004	Tax year 2005
	EI claim 45 weeks of regular benefits paid			EI claim 22 weeks EI paid: 20 weeks regular, $6,000 2 weeks sickness or compassionate care, $600
You received EI regular and sickness or compassionate care benefits in tax year 2005. Regular benefits were also paid in the 10 year period prior to the tax year 2005. Therefore if your net income exceeds $48,750, you will have to repay a percentage of the regular benefits received for tax year 2005, but not the sickness or compassionate care benefits.