I’m on disability and other than disability payments I have no other source of income.
This year I started playing a musical instrument on the streets for tips and made about $3000 CDN over the summer and fall. I also made $600 from several gigs I was hired to play at.
I entered this information in TurboTax under “Tips, Gratuities, and other employment income” and TurboTax is telling me I will get a $900 refund courtesy of the Canada Workers Benefit.
I told my family and everyone I asked told me not to report it as the government could conceivably come after me and want that money back with interest because it’s not a proper job and they are worried that I don’t actually qualify for that money.
So I want to ask the tax experts: can I safely report that $3000 tip income and receive the $900 refund without worrying about potential penalties?
You have to report your income because there are penalties for not reporting income, especially when you're talking about thousands of dollars. In your case, since you've made over $3500 in total, you should enter that income as self-employment instead of tips, as you need to pay CPP contributions on employment/self-employment income that's more than $3500.
As for the CWB, you can review who is eligible for it on this CRA website: Canada Workers Benefit - Who is eligible