It has been a little over a week since my last email. I hope you find this information useful. Changes related to income tax, government supports and dues dates are changing almost by the hour. I have broken this email into two main sections. Items that effect individuals and things that effect businesses. Some of these items are the same as a week ago but a number are new or different.
Filing Due Dates
The filing due date for person tax returns is now June 1st, moved from April 30th.
For the few clients that have a Trust or Estate returns that were due on March 31st it is now May 1st. Trusts with an April 30th or May 31st due date are now due June 1st.
For those proprietors that normally have a June 15th due date it is still due June 15th.
Payment Due Dates
For any income tax owing or instalments of income tax the payment due date is now September 1st. Until that date CRA will charge no penalties and no interest on any payments.
Support for Individuals
Anyone receiving a GST/HST credit will get an extra payment equal to the full year amount you are receiving in the 2019/20 year (expected in May). This is automatic. You do not need to apply. Anyone receiving Canada Child Benefit will receive an extra $300 per child. This is also automatic.
Previously announced changes to EI benefits were cancelled and replaced with a new program called the Canada Emergency Response Benefit (CERB). Details can be found here:
There are a couple of key items for this program:
- Must be at least 15 years old (so many students will qualify)
- You must have stopped working due to Covid-19. It is not available if someone just does not have a job or cannot get a job.
- You must have had $5,000 of earned income (employed or self-employed) in 2019 or in the 12 months before you apply.
You should know this does not replace regular EI. So if you become unemployed apply for benefits as usual. Application made now will automatically get you enrolled in the CERB program. The application for this will be primarily through your CRA MyAccount. Applications open up on April 6th. So if you do not have access to your CRA account I encourage you to get that set up. Applying for this benefit is not something my firm will be able to do for you.
It is important to note that for many EI benefits you must have a Record of Employment (ROE). To issue these, final paycheques up to the date of a layoff must be issued. So we are working with our clients to issue paycheques and issue ROEs so employees can apply and receive EI benefits.
Student loan interest and payment are suspended for six months.
RRIF minimum withdrawals are reduced by 25%.
Filing Due Dates
Corporations that would normally have an income tax filing due date after March 18th and before June 1st are now due June 1st. Payroll filing and remittances dates have not changed. GST filing dates have not changed. WSIB filings due after March 25th are now due August 31st.
EHT filings due after March 25th are now due August 31st. Ontario has increased the EHT exemption amount to $1,000,000 from $490,000 (retroactive to January 1st) so many business will have lower premiums to pay.
Payment Due Dates
For any income tax owing or instalments of income tax the payment due date is now September 1st. Until that date CRA will charge no penalties and no interest on any payments. This only applies to income tax.
GST/HST payments due after March 18th are now due June 30th. Payroll due dates have not changed.
Support for Business
There are two wage support programs for business.
Temporary Wage Subsidy
Note: This is not available to you if you qualify for the larger Canada Emergency Wage Subsidy described below.
For the next three months (March 18th to June 20th) there will be a 10% wage subsidy. This is to a maximum of $1,375 per employee and $25,000 per business. There will not be any actual money from the government. Employers will simple reduce withhold tax remittances. How this works in practice is unknown. Hopefully, by April 15th we will learn how to actually do this. The government has said to manually calculate this and reduce you payroll remittance by the subsidy. You can only reduce tax withheld, not CPP or EI premiums. Also, if the subsidy exceeds the tax withheld you can reduce a future remittance. Those clients that use a payroll provider (ADP, Wagepoint etc.) nothing changes until the detailed rules are announced by CRA. For those clients that do not have immediate cash flow problems I encourage you to wait until the detailed rules are announced before claiming your subsidy. We all want to reduce the future complexity when T4s need to be filed next year.
Canada Emergency Wage Subsidy
Details of this new 75% subsidy can be found here:
Key items from this program are:
- Sales must decrease 30% in March, April or May compared to the previous year period (exceptions apply)
- There are three eligibility periods that are not calendar months. The dated run from March 15th to June 6th.
- Support is generally 75% of wages paid up to a maximum grant of $847 per employee per week. There is no limit to the subsidy.
- Support may be up to 100% of wages if employers pay an amount that is at least 75% of pre-crisis earnings but less than $847 per week. Details of this calculation have not been released
- There are anti-avoidance rules for payments made to non-arms length employees.
- Payments from CRA will take 3-6 weeks!
These two programs are complex and can interact. Every situation is different and we will assist all our clients as we work through this.
Canada Emergency Business Account
On March 27, the federal government announced additional measures to support small businesses. The Canada Emergency Business Account is an interest-free loan of $40,000 for qualifying businesses. Up to $10,000 of that amount will be eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.
Our office is open for clients that need to drop off paperwork. But we do encourage you to send up information electronically. We have a table at the front door to leave documents. All documents are being “aged” so we will not be handling paperwork immediately after we receive it. We are not meeting anyone and anything we have to return to clients will be mailed or emailed. My staff are mostly working remotely from home so there will be some delays as we continue to help you.