Updated October 16, 2026
Short answer: the loan itself is not taxable income, because you have to pay it back. The forgivable portion (up to $20,000 on a $60,000 loan) was taxable, and the CRA’s position is that it had to be included in income in the year you received the loan, usually 2020 or 2021. If you later repaid the full loan, you can claim an offsetting deduction.
How the rules work
- Year you received the loan: the forgivable amount was included in income under the Income Tax Act’s government assistance rules, unless you elected instead to reduce the related expenses (CEBA had to be used for non-deferrable expenses like payroll, rent and utilities).
- If you repaid on time and kept the forgiveness: nothing more to do. The forgiven amount was already taxed.
- If you missed the forgiveness deadline and repay the full loan: because you are repaying the amount that was included in income, you can generally deduct it in the year you repay. Many owners are in this position now.
- Interest: the 5% interest charged since January 19, 2024 is generally deductible as a business expense, like interest on any business loan.
- Refinancing: paying off CEBA with a new loan counts as repaying it. Interest on the new loan is generally deductible too.
Example
A corporation received a $60,000 CEBA loan in 2020 and reported $20,000 as income that year. It missed the January 2024 forgiveness deadline and refinances the full balance in November 2026. In its 2026 tax year, it can generally deduct the $20,000 it previously included, plus the interest paid.
What to do
- Check how your accountant reported CEBA in the year you received it.
- Keep records of the payoff date and amount, and of interest paid.
- If you never reported the forgivable portion, talk to your accountant about correcting it.
Tax treatment depends on your situation, so confirm with your accountant. For repayment options, see the CEBA loan repayment guide.
Next step
If your business is still operating, refinancing replaces the December 31 lump sum with regular payments. Compare lenders that refinance CEBA loans, or use the repayment calculator to size the payment.
This article is general information, not legal, tax or financial advice. ceba.ca is an independent website and is not affiliated with the Government of Canada. Official program information is at ceba-cuec.ca. If your loan has been assigned to the CEBA Program, the CRA CEBA Contact Centre is at 1-800-361-2808.