CRA grants respite to some teachers in tax-refund tangle

Pending legislation seen as reason for agency withholding nearly 50,000 teachers' tax returns

CRA grants respite to some teachers in tax-refund tangle

Following a controversial news report last week, the Canada Revenue Agency (CRA) has announced that it will now release teachers' pending tax refunds, but only if they are in financial distress.

The past reporting by CBC News stated that the CRA is withholding around 50,000 teachers' tax returns. The sticking point: a tax credit that the teachers claimed for school materials purchased for their children.

The federal government has increased the maximum reimbursement teachers can earn from $150 to $250 under the Eligible Educator School Supply Tax Credit. However, that increase is part of new legislation (Bill C-8) that has yet to be approved by Parliament.

Teachers who applied for the credit would not receive their tax refunds until the bill becomes law, according to the CRA. Several instructors who are expecting large returns expressed frustration at the delay, and had no idea there was a problem with the credit when they filed their taxes.

The CRA appears to have changed its mind now, informing CBC News by email on Monday night that it had implemented a method that allows it to examine teachers' tax returns and provide refunds without regard for their claim for the school supply credit.

When Bill C-8 becomes law, the CRA says it will proactively examine the returns and award the credit.

According to spokesperson Etienne Biram, the agency will only grant monetary relief to instructors who are "experiencing great financial trouble." However, he didn't say what kinds of economic circumstances are acceptable or how teachers might prove their case.

Among those affected is Kajsa Hansen, whose anticipated $12,467 tax refund has been delayed because she claimed the $68 school supply credit. Hansen attributed her huge tax refund to medical expenses related to a genetic disease that limits her mobility. She claims she requires the funds to pay for anticipated expenses, such as a new wheelchair battery.

Hansen plans to contact the CRA to explain her situation, but believes that teachers should not have to jump through hoops to receive their returns.

"It seems a bit of an overreach. I mean, nobody else is having to prove that they have financial hardship to get their own money," she told CBC News.