The 2019 tax return deadline is extended to June 1, and tax balances and instalments may be deferred till September 1st without interest or penalties. However, if you are expecting a refund, or if you receive or will receive the GST/HST credit, Guaranteed Income Supplement (GIS) or Canada Child Benefit (CCB), or other income-tested benefits (e.g. BC Pharmacare, for which you must register), it's best to file your return as soon as possible.
Support has been announced for small businesses, employees, self-employed, etc.
Businesses can also defer payment of any income tax amounts that become owing on or after March 18 and before September 2020, September 1, 2020. This applies to tax balances due as well as instalments, under Part I of the Income Tax Act. This does not apply to GST/HST remittances or instalments, or remittances of payroll or other withholdings. These are amounts that are collected on the government's behalf by businesses, so the funds do not belong to the business. Update: On March 27, 2020, the government announced that GST/HST remittances could be deferred until June.
Goods and Services Tax Credit (GSTC)
A one-time special payment by early May 2020 will double the maximum annual payment amounts for the GST/HST credit for the 2019-20 benefit year. An additional payment will be made in May to individuals eligible for the GSTC, as well as to some who are not eligible for the regular GSTC. This will be based on 2018 tax returns that have been filed. See the Video Tax News COVID-19 Economic Response Plan - Legislative Update - March 25, 2020 for more details.
Canada Child Benefit (CCB)
It is proposed to increase the maximum annual Canada Child Benefit (CCB) payment amounts, for only the 2019-20 benefit year, by $300 per child, as part of the May 2020 payment. Families who do not receive CCB may get a partial payment, depending on their income. This will be based on 2018 tax returns that have been filed. See the Video Tax News COVID-19 Economic Response Plan - Legislative Update - March 25, 2020 for more details.
RRIF Minimum Annual Withdrawals
Effective immediately, Canada Revenue Agency is accepting digital signatures on the T183 and T183CORP. These forms are normally signed in person every year to authorize tax preparers to file taxes.
Canada Revenue Agency (CRA) COVID-19 Resources
There are many other components to this than what is listed on this page. For more detail see Key Points Canada's COVID-19 Economic Response Plan (pdf). A few changes were made by the government to these key points. See the Video Tax News COVID-19 Economic Response Plan - Legislative Update - March 25, 2020.
Canadians Outside Canada
- re Employment Insurance (EI), Work-Sharing Program, Student Loans, etc, includes a link to the online application for EI sickness benefits.
- One-week waiting period for EI sickness benefits will be waived for new claimants who are sick or quarantined, and they will not have to provide a medical certificate.
- New toll-free phone number will be available in April 2020, dedicated to support enquiries related to waiving the waiting period, but make sure you submit your application for benefits before calling the toll-free number.
- Emergency Response Benefit: Longer-term income support for workers to be delivered through CRA to provide support to workers who are not eligible for EI and are facing unemployment or reduced hours as a result of COVID-19. This includes parents with children who require care or supervision due to school closures, and aren't able to earn employment income. Application can be filed in My Account or using the dedicated phone line starting April 2020 - possibly by April 6th. Payments should be sent about 10 days later. Applications must be filed by December 2, 2020. These measures are in the Canada Emergency Response Benefit Act. See the Video Tax News information and 10 minute video on this topic at COVID-19 Economic Response Plan - Legislative Update - March 25, 2020.
- Work-sharing program is implementing temporary special measures and is extended.
- Repayment of Canada Student Loans and Canada Apprentice Loans paused until September 30, 2020, with no accrual of interest. This will include pre-authorized debits.
Video Tax News Videos re COVID-19 Measures
Update: March 27, 2020 10% increased to 75%, back-dated to March 15th - more information to come on March 31st from the Department of Finance.
- available to non-profit organizations, registered charities, or CCPCs who have an existing business number and payroll program account with CRA on March 18, 2020, and who pay remuneration to an employee. CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million.
- The subsidy, which is taxable income to the organization, is 10% of remuneration paid between March 18 and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 per employer.
- The subsidy can be deducted from your remittance of income tax (but not CPP/EI) withheld from those wages, starting with the first remittance period that includes remuneration paid between March 18 and June 20, 2020.
- If the subsidy exceeds the income tax withholdings for the period, it can be carried forward to reduce a future remittance.
Example - regular Ontario remitter with April 15 remittance for Jan-Mar 2020:
- 3 employees earning $30 per hour working 8 hours per day Monday to Friday, paid bi-weekly, with a pay date on March 27th.
- remuneration paid between March 18 and 31, 2020 will be for the March 27th pay date: per employee: $30 x 8 hrs x 10 days = $2,400. The subsidy is 10% of this, or $240 per employee. Total for 3 employees = $720.
- Assuming each employee's claim code is the minimum, the withholding tax will be $428 (rounded), so for 3 employees = $1,284.
- The net remittance for income tax for the 3 employees on April 15th will be $1,284 less $720 = $564. There will also be CPP and EI withholdings, which must be remitted in full.
- No mention was made of vacation pay. If vacation pay is normally calculated and paid with each pay, it probably would be included in the remuneration subject to the 10% subsidy. We'll update when we have further information.
- The subsidy can be claimed at the end of the year instead of with each remittance, if desired, or transferred to the next year's remittance.
Wage Subsidy for Employers - Free Excel worksheet to help Canadian businesses and their advisers calculate the subsidy, provided by Tax Templates Inc.
See the Video Tax News #4 video above, and
Financial Support for Individuals
Contact your financial institution to enquire about up to a 6-month payment deferral for mortgages, and possible relief on other credit products. See the RBC announcement. However, wait times for enquiries may be lengthy due to the quantity of inquiries. Check your online banking, as some options may be available online, such as skipping a mortgage payment (which may be available only certain hours of the day). Check your financial institution's website to see if they have an online booking tool to schedule a time to speak with them.
March 27, 2020 Update
- The federal government announced government-guaranteed bank loans of $40,000 which will be interest-free for the first year, and if certain conditions are met, the first $10,000 will not have to be repaid.
- Temporary Wage Subsidy for Employers - increased.
- GST/HST remittances deferred until June.
- The Bank of Canada has reduced the target for the overnight rate three times in March. The rate has been reduced to 0.25% in that time, from 1.75%, where it had been since October 24, 2018.
Other Financial Support for Businesses
Financial institutions will assess the needs of small business banking customers on a case-by-case basis. Contact your advisor at your bank.
- working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses
- postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less.
Revised: March 30, 2020
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