COVID-19 Changes to Financial Relief Measures and Upcoming Deadlines
The Government of Canada is continually making changes to the COVID-19 financial relief measures. See below for a summary of some important changes as well as reminders of upcoming due dates and payment deadlines that may impact you or your Company. Canada Revenue Agency (“CRA”) recently announced that there have been cyber attacks on CRA’s ‘My Account’ and other online services. CRA online services have since resumed.
Deadline for Canada Emergency Business Account (CEBA):
- The deadline to submit your CEBA application to your financial institution is August 31, 2020. After completing the application with your financial institution, you must upload the supporting documentation by September 3, 2020.
- As of June 26, 2020, the eligibility criteria for CEBA was expanded to include sole proprietors receiving income directly from their businesses, businesses that rely on contractors and family owned corporations that pay employees through dividends.
- Applicants with payroll less than $20,000 could apply through the “Eligible Non-Deferrable Expenses Stream” and would require the following:
- A business operating account with a participating financial institution
- A CRA business number
- Have filed a 2018 or 2019 tax return; and,
- Have eligible non-deferrable expenses between $40,000 and $1,500,000 in 2020.
- Non-deferrable expenses includes rent, capital leases, property taxes, utilities, insurance and employment costs
Deadline Extended for Canada Emergency Commercial Rent Assistance (CECRA):
- The program has been extended by another month to cover eligible small business rents for the month of August 2020. The program was already previously extended to cover the month of July 2020.
- Existing applicants have until September 14, 2020 to opt in for the July and August extensions.
- New applicants have the choice of applying for the three-month initial period or total five months, but need to do so by the original date of August 31, 2020.
- The requirement to claw-back insurance proceeds and provincial rent supports from the forgivable loan amount has been removed for both existing and new applicants. Existing applicants will have any previously clawed-back amounts restored to the forgivable loan.
Changes to the Canada Emergency Response Benefit (CERB):
- CRA announced that CERB will be extended by an additional 4 weeks. The Benefit is now available to eligible workers up to a maximum of 28 weeks (7 periods).
- The Benefit is available for the eligibility period from March 15 to October 3, 2020. Applicants can apply no later than December 2, 2020 for payments retroactive to within that period.
Canada Emergency Wage Subsidy (CEWS):
- CRA is continually making changes to their CEWS calculator. You are encouraged to visit their website often and download the updated templates especially if you are preparing and filing your own applications. Effective August 17, 2020, CRA is accepting CEWS applications under the revised rules. The revisions to the program are complex and involve various criteria to determine eligibility. We are here to assist you with questions or filing of your applications.
Temporary Wage Subsidy (TWS):
- All employers eligible for the TWS are expected to file form PD27 - Temporary Wage Subsidy Self-identification Form for Employers. CRA will use this form to reconcile the subsidy to the employer’s payroll account to ensure you don’t receive a discrepancy notice. Although there is no stated due date, CRA is encouraging employers to complete this form by the end of 2020.
Due Dates and Payment Deadlines:
The CRA announced last month that the payment due date for 2019 individual tax returns, 2019 or 2020 corporation and trust returns, as well as applicable instalment payments was extended to September 30, 2020.
Penalties and interest will not be charged if the returns are filed and payments are made by the new extended deadline of September 30. Please ensure that you send us your tax information as soon as possible if we have not already completed and filed your 2019 personal income tax return.
- You will not be charged late-filing penalties or interest as long as your tax returns are filed and payments are made prior to September 30, 2020. This includes the June 15, 2020 and September 15, 2020 instalment payments for those required to pay instalments and have not already made these payments.
- Trusts with a filing due date of March 31, 2020 or April 1, 2020 to August 31, 2020 will not be assessed penalties or charged interest if the returns are filed and payments are made by September 30, 2020.
- Extensions to the filing due date and the waiver of penalties and interest also applies to Forms T1135, T106, and any elections, forms and schedules that must be filed with the personal tax return, provided they are filed by September 30, 2020.
- If you have received a Notice of Assessment that states the deadline for payment is April 30, 2020 or September 1, 2020, those dates are now incorrect. The correct payment due date is September 30, 2020.
- Corporations with a filing due date between March 18, 2020 and August 31, 2020 have until September 30, 2020 to file their returns and pay any taxes owing and instalment payments due during this period.
- The waiver of penalties and interest applies to Forms T1135, T106, and any elections, forms and schedules that must be filed with the corporate tax return, provided they are filed by September 30, 2020.
Existing Debts with CRA:
- CRA will also waive arrears interest on existing tax debts related to individual, corporation and trust income tax returns from April 1, 2020 to September 30, 2020, and from April 1, 2020 to June 30, 2020 for GST/HST returns. Any interest already assessed on a taxpayer’s account prior to this period will not be cancelled, however interest will cease accruing during this period.
Introduction of New Simplified Employment Insurance (“EI”) Program:
The Government of Canada is proposing to implement three new benefits after the CERB has ended. This legislation has not been passed and the details of these benefits are yet to be announced.
- The Canada Recovery Benefit (CRB) will provide $400 per week for a maximum of 26 weeks for those ineligible for EI. Anyone eligible for EI will be eligible for the same minimum $400 for at least 26 weeks (similar to that mentioned for those ineligible for EI), as long as they have worked at least 120 hours to qualify (which is far below the existing EI requirements).
- The Canada Recovery Sickness Benefit (CRSB) will provide $500 per week for up to two weeks for workers who are sick or must self-isolate due to COVID-19.
- The Canada Recovery Caregiving Benefit (CRCB) will provide $500 per week for up to 26 weeks per household for eligible Canadians who have to stay home to care for children under the age of 12 due to school or daycare being closed or to care for eligible dependent family members.
CRA Cyber Attack:
Earlier this month, CRA announced that there was a breach of cybersecurity. The breach was addressed on Saturday, August 15th when the website was disabled after fraudsters gained access to approximately 5,600 usernames and passwords. Online access to “My Business Account” resumed on Monday, August 17th and all other areas were brought back online in the evening on Wednesday, August 19th. All individuals affected by the cybersecurity breaches will receive a letter from the CRA explaining how to confirm their identity such that their accounts are protected and restored.
Please note that the CRA never sends text messages or emails. If you receive correspondence in this manner, please call our office immediately so that we can advise you appropriately. Do not respond to CRA text messages, emails or phone calls which state that you owe money, that the legal department has a warrant for your arrest or that you have an expected refund. These are scams. Generally, the CRA corresponds via letters, and in this case regarding the cybersecurity breach, they will only be contacting affected individuals via formal letter.
Do not hesitate to contact us if you have any questions regarding how any of the above impacts you or your Company.
NOTE: Due to the rapidly evolving changes with respect to the Government’s Economic Response Plan to Covid-19, please understand that any posts written in the past may not be reflective of the current applicable obligations, rights and benefits of individuals and businesses.