Following complaints, CRA offers reprieve for some teachers with tax refunds stuck in limbo

The Canada Revenue Agency (CRA) says it's now offering to release teachers' tax refunds stuck in limbo, but only if the teachers are financially strapped. 

The announcement follows CBC News reporting last week that the CRA is holding back approximately 50,000 teachers' tax returns, all because of a tax credit they claimed for school supplies purchased for their students.

In what's known as the Eligible Educator School Supply Tax Credit, the federal government has upped the maximum rebate teachers can receive, from $150 to $250. The problem is, the increase is included in new legislation (Bill C-8) that has yet to be passed in Parliament. 

The CRA previously told CBC News that teachers who applied for the credit won't get their tax refunds until the bill becomes law. Several teachers waiting for substantial refunds said they were frustrated by the delay, and had no idea when filing their taxes that there was an issue with the credit. 

Now, it appears the CRA has had a change of heart.

On Monday night, the agency told CBC News by email that it has implemented a process whereby it can assess teachers' tax returns and issue refunds without their claim for the school supply credit. In those cases, the CRA says it will proactively reassess the returns and issue the credit once Bill C-8 becomes law.

Questions about 'extreme financial hardship'

However, the agency will only offer this reprieve for teachers who are "experiencing extreme financial hardship," said spokesperson Etienne Biram. He did not explain what types of financial situations meet the bar or how teachers can make their case. 

This concerns teacher Kajsa Hansen, whose expected $12,467 tax refund is delayed because she claimed the school supply credit — which will net her $68.

"They aren't saying what they consider extreme financial hardship," she said. "How do I prove that? What are their standards?" 

WATCH | Teachers' tax returns stuck in limbo:

Tax refunds delayed for teachers who claimed new credit

3 years ago

Duration 2:00

Teachers who claimed a tax credit to help with the costs of school supplies aren’t receiving their tax refunds on time. The Canada Revenue Agency says it can’t process those tax returns because the credit is part of a federal bill that hasn’t passed through Parliament yet.

Hansen said her large tax refund is mainly due to medical expenses for a genetic condition that affects her mobility. She says she needs that money to pay for upcoming bills, such as a new battery for her wheelchair. 

Hansen said she plans to call the CRA to state her case, but feels teachers shouldn't have to jump through hoops to get their refunds.

"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."

Impacted teachers can contact the CRA at: 1-800-959-8281.