Tax and CRA Updates - Response to the Coronavirus (COVID-19)
The coronavirus pandemic is creating an everchanging environment, with businesses, governments, and health officials reacting and responding to the crisis day-by-day. We will do our best to keep you informed with any relevant information to you as our client, as we receive it. A full list of programs and assistance announced by the Federal Government can be found at https://www.canada.ca/en/department-finance/economic-response-plan.html.
Temporary Wage Subsidy – The government will provide all eligible small employers a temporary wage subsidy for three (3) months, equal to ten percent (10%) of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately by reducing their remittances of income tax withheld on their employees’ remuneration (Source Deductions). Eligible small employers include corporations eligible for the small business deduction, as well as non-profit organizations and charities. We are working on a template for this change, and we will ensure that all of our clients that we do payroll and source deductions for are receiving the benefits from the subsidy. If you do your own payroll and require help with this, please let us know.
Employment Insurance (EI) – The mandatory one-week waiting period for employees to receive EI has been waived, effective March 15th, 2020, as well as the requirement to provide a medical certificate to access EI sickness benefits. A Record Of Employment (ROE) still needs to be issued for any/all employees to receive EI. The one week waiting period is still applicable if you are laying off the employee due to shortage of work.
An Emergency Care Benefit has been announced providing up to $900 bi-weekly, for up to 15 weeks for the following:
- Workers, including self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI;
- Workers, including self-employed, who are taking care of a family member who is sick with COVID-19 but do not qualify for EI; and
- Parents with children who require care or supervision due to school closures and are unable to receive employment income.
Application for the Emergency Care Benefit will be available in April 2020, with access by phone or online.
Personal Income Tax – Although Finance Minister Bill Morneau has announced that the filing deadline for personal income tax returns is postponed to June 1, 2020, we strongly encourage you to adhere to the standard April 30th deadline, as accountants will still have many other types of deadlines to meet at the end of May. There has been no change to the filing deadline for self-employed individuals, which is June 15, 2020.
Income Tax Amounts Owing – The Canada Revenue Agency (CRA) will allow the payment of any income tax amounts that become owing on or after March 18th, 2020 to be deferred to September 1st, 2020. Tax balances and installments due will not accumulate interest and penalties during this period. Any amounts owing before March 18th, 2020 do not qualify for deferment.
Audits – The CRA will not initiate any post assessment GST/HST or income tax audits for the next 4 weeks. Audit interaction with the majority of taxpayers and representatives will be temporarily suspended.
Corporate Tax – As of Wednesday, March 18th, 2020, no announcements were made regarding the filing deadlines of corporate income tax returns. Corporate tax returns are due six months after the company’s fiscal year end. For trusts with a taxation year ending on December 31, 2019, the return filing due date is deferred to May 1, 2020. Alberta has made no mention of any changes to provincial taxes owing.
Electronic Signatures – As a temporary administrative measure, the federal government will accept electronic signatures on income tax forms (T183 and T183Corp), which authorize accountants and bookkeepers to electronically file your tax returns.
An Emergency Support Benefit is being introduced for Canadians who lose their jobs or face reduced hours and are not eligible for EI. An EI Work Sharing Program will be implemented to provide EI benefits to workers who agree to reduce their normal working hours, and eligibility will be extended to 76 weeks and the application process will be streamlined.
Goods and Services Tax (GST) – The government is proposing to provide a one-time payment by early May 2020 through the Goods and Services Tax credit (GSTC) that will double the maximum annual GSTC payment amounts for the 2019-2020 benefit year. The average amount received will be around $400 for individuals and $600 for couples.
Canada Child Benefit (CCB) – The government is proposing to increase the maximum annual CCB payment amounts by $300 per child for the 2019-2020 benefit year.
Registered Retirement Income Funds (RRIFs) – The government is reducing required minimum withdrawals from RRIFs by twenty-five percent (25%) for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
The King Business Solutions Centre is operating within our standard office hours, but we have decided to limit our interaction with the public by locking our interior door. You are still welcome to drop-off and pickup from our front vestibule and call us if you need any assistance. We also have a client portal, email, and fax capabilities. Give us a call at 780-986-4132, we are here to help!