On March 2, 2022 CRA added the following Q & A in respect of CERB to the CEWS FAQ:
6-2.4 Is the CEBA loan taxable to the recipient? New: March 2, 2022
Only the forgivable portion of a CEBA loan is taxable and it is taxable in the year in which the loan is received. For example, if a business received a forgivable portion of $10,000 in 2020, they would include that amount as income for the 2020 tax year, regardless of the year they repaid their CEBA loan.
However, if the forgivable loan is received in respect of an outlay or expense that is made or incurred before the end of the taxation year following the year in which the loan is received, the recipient can elect to:
Not include the forgivable loan amount in the income of the year in which the loan is received, and
Reduce the outlay or expense deduction by the same amount.
Recipients that make this election must do so via a signed letter accompanying the income tax return for the year the forgivable loan is received or for the year the outlay or expense is made or incurred, whichever is later. For further information on how to elect to reduce the amount of an outlay or expense, see archived Interpretation Bulletin IT-273R2.
If the amount included in income (or not deducted as outlay or expense) is subsequently repaid as a result of a legal obligation to repay the amount, a deduction for the repayment can be obtained for the year in which the repayment is made. For example, if a business was unable to meet the December 31, 2023 deadline, and then later repaid the entire loan (including the forgivable portion) in 2024, they could obtain a deduction equal to the forgivable portion for the 2024 tax year.