COVID-19 Due Dates, Payment Deadlines and Other Updates
Due Dates and Payment Deadlines:
CRA previously announced September 1, 2020 as an extended due date and payment deadline for many income tax filings of both individuals and businesses. As the extended date is quickly approaching, we would like to remind you of the following:
- 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 and have not already made this payment.
- 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 September 15th instalment due date remains unchanged
- Corporations with a filing due date between March 18, 2020 and August 31, 2020 have until September 1, 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 Form T1135 and any elections and forms that must be filed with the corporate tax return, provided they are filed by September 1, 2020.
Prescribed Interest Rate:
- The prescribed rate for the third quarter of 2020 decreased to 1%.
- Funds loaned on or after July 1, 2020 will be eligible for the decreased rate and the rate will be locked in for the duration of the loan.
- Prescribed rate loans can be an effective financial and tax planning tool. We would be happy to advise you on this matter.
- On June 16, 2020 CRA announced that CERB will be extended by an additional 8 weeks. The Benefit is now available to eligible workers up to a maximum of 24 weeks.
- 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.
- A record of employment (ROE) is not required to collect the CERB. However, if employers have employees who have stopped working because of Covid-19, they must issue ROEs as soon as possible. If employees are being paid with the CEWS, an ROE is only required for those who have an interruption of earnings when the CEWS ends. The ROE will be used to determine if employees qualify for EI benefits if they are still off work when their CERB or CEWS end.
- The CEWS is currently in place to August 29, 2020. On July 13, 2020, Prime Minister Trudeau stated that the CEWS will be extended by 12 weeks to December 2020. A formal announcement with additional details is expected this week.
- Applications are currently available for the first four periods of the program from March 15 to July 4, 2020.
- The government is reviewing potential changes to the eligibility criteria of the program commencing in Period 5. Details are expected to be announced soon.
- TWS was available for remuneration paid from March 18 to June 19, 2020. This program has not been extended.
- A self-identification form will be available soon. Each eligible employer will be required to report 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 10% due to CEWS.
- If you did not reduce your payroll remittances during the eligibility period, CRA will pay the eligible amount reported on the self-identification form to you or transfer it to your next year’s remittance account.
- As of June 26, 2020, the eligibility criteria have been expanded to include two application streams: Payroll Stream and Non-Deferrable Expenses Stream.
- The Non-Deferrable Expenses Stream is for applicants with payroll less than $20,000 and eligible non-deferrable expenses between $40,000 and $1,500,000, who have a Canada Revenue Agency business number and have filed a 2018 or 2019 tax return.
- Applications under the Non-Deferrable Expenses Stream will follow a two-step process:
- Step 1: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing/operating account. The financial institution will then direct applicants to Step 2 of the application process.
- Step 2: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation, such as receipts, invoices and agreements, of the 2020 Eligible Non-Deferrable Expenses and to complete the application.
- The Government of Canada will assess application information submitted via financial institutions in Step 1 together with the supporting documentation and information provided in Step 2. If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.
- If you receive the CEBA, please confirm with your financial institution when loan repayments may begin in order to qualify for 25% of the loan to be forgivable.
- The program has been extended by one month to cover eligible small business rents for the month of July 2020.
- Existing applicants have until September 14, 2020 to apply for the one month extension.
- New applicants have the choice of applying for the three-month initial period or four 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.
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.