COVID-19 Changes to filing deadlines and other updates
The Government of Canada recently announced the following changes to the income tax filing deadlines and updates to the Covid-19 relief programs:
- Canada Revenue Agency (CRA) is encouraging all individuals to file their tax returns by June 1st and June 15th for self-employed individuals to accurately calculate benefits which rely on your 2019 tax returns. If CRA is unable to process your 2019 return on time, your benefits will continue based on your 2018 tax returns and adjustments will be made once the updated information is available.
- On May 22, 2020 CRA announced that 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 1, 2020. This includes the June 15, 2020 instalment payment for those who have to pay by instalments.
- 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 1, 2020.
- The waiver of penalties and interest applies to Form T1135 and any elections and forms that must be filed with the personal tax return, provided they are filed by September 1, 2020.
- The application process for eligible students opened May 15, 2020
- If you haven’t ever filed a Canadian tax return, you must register with the CRA before you can apply
- All applications must be submitted before September 30, 2020
- Corporations with a filing due date between March 18, 2020 and August 31, 2020 now have until September 1, 2020 to file their returns
- Taxes owing and instalment payments due during this same period have also been extended to September 1, 2020
- The waiver of penalties and interest applies to Form T1135 and any elections and forms that must be filed with the corporate tax return, provided they are filed by September 1, 2020
- The CEWS has been extended by an additional 12 weeks to August 31, 2020
- The government indicated that it will review the program and will consult with business groups to determine if adjustments are required including whether a change to the 30% revenue decline threshold should be made.
- To date this program has not been extended
- Previously an organization that was eligible for both the CEWS and TWS had to reduce the CEWS claim for 10% TWS. It was recently announced that an employer who is eligible to claim both subsidies can now just claim the 75% CEWS and does not need to apply for the 10% TWS.
- All employers that are eligible for the TWS will be required to complete a self-identification form, regardless of whether you have already claimed TWS or not. Employers will use this form to indicate the amount they have claimed, the amount they are eligible for but have not claimed, or if they are electing to claim an amount lower than the 10% they are eligible for due to CEWS. This form, which is supposed to be available in June, will be used by CRA to reconcile payroll accounts for the amounts already claimed, or to credit payroll accounts for amounts that have not yet been claimed.
- The eligibility criteria was expanded to include sole proprietors receiving income directly from their businesses, business that rely on contractors and family owned corporations that pay employees through dividends
- Applicants with payroll less than $20,000 would need 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
- Non-deferrable expenses includes rent, property taxes, utilities, insurance and employment costs
- The application date for the revised eligibility criteria has not yet been announced
- The program is being administered by Canada Mortgage and Housing Corporation (CMHC)
- Property owners must offer a minimum 75% rent reduction for the months of April 2020 to June 2020 to eligible small business tenants
- Eligible small business tenants include businesses that are paying less than $50,000 per month in gross rent with annual revenues of less than $20 million and who have either closed or experienced a 70% or more reduction in pre-COVID-19 revenues
- As part of the application process, you will have to provide a rent reduction agreement as well as landlord and tenant attestations
- CECRA will cover 50% of the rent via a forgivable loan, the tenant will pay up to 25% of the rent and the landlord will have to write off the remaining 25%
- If you restructure, reorganize or dissolve your business you will need to repay the loan
Do not hesitate to contact us if you have any questions.
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.