Yesterday the Province of Ontario announced the closure of all non-essential business effective midnight today. The list can be found here:
Many of our clients are included on this list and some are not and must close any physical locations. Remote work is always allowed. Accounting firms have been deemed essential. Some of you will know we provide payroll services and other services required by many of these essential services.
Williams Accounting will provide as much support as we can to our clients at this difficult time. The office will be available for dropping off paperwork if required. There is a table at the front door. But we do encourage you to send documents electronically or by mail. Any work that is completed will be returned to you electronically and any paper documents will be mailed back. Any large boxes will just be held for a later pick up. Staff may be working from home and so if you call them, leave a message and they will return calls.
There is more clarification on some of the announcements from last week so here is an update. I have highlighted in yellow where information is now known.
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. For those proprietors that normally have a June 15th due date it is still due June 15th. For businesses that are GST/HST registered the filing dates have not been changed. Those with filing deadlines of March 31st remain. Any April 30th due dates for GST/HST remain. And no date extension have been announced for Employer Health Tax or WSIB premiums. Charity returns normally due June 30th are now due December 31st. Due dates for T2 returns for non-profits have not changed so late filing could still be penalized.
Payment Due Dates
For any income tax owing or instalments of income tax the payment due date is now August 31st. Until that date CRA will charge no penalties and no interest on any payments. This only applies to income tax. It does not apply to HST, payroll source deductions, WSIB, EHT and other charges. Also, this only applies to Part I tax. For most of you that is just regular income tax. But for some of our corporate clients where your company may still owe amounts as soon as March 31st we will advise you directly. Please note that this is really just an interest free loan from the government. Once August 31st comes the funds are due and interest will be charged.
Support for Individuals
Anyone receiving a GST/HST 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.
The are new enhanced EI benefits. This applies to both employees and self-employed. First thing to know is this does not replace regular EI. So if you become unemployed apply for benefits as usual. The new benefit only applies in cases where you have been unable to work due to contracting Covid-19, caring for someone, looking after your children, self-isolating or lost income due to not being able to work and not being eligible for regular EI. The application for this will be primarily through your CRA MyAccount. You cannot apply until April (date not specified). 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%.
Support for Business
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 legislation is passed and 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.
There have been some announcements about businesses being able to borrow to help with cash flow. I do not know these details yet. Be cautious in borrowing more money.