While the announcements of new financial relief programs and tax filing extensions have not been happening daily as they were when COVID-19 started, they have still been coming. This communication is intended to provide an update on several measures that have recently been extended or altered in some way.
Specifically, we will let you know what has changed with respect to:
- Tax deadlines for filing and payments; and
- Extensions for the Canada Emergency Wage Subsidy.
INCOME TAX DEADLINES
The Canada Revenue Agency (CRA) has created and updated a website with all of the various changes to filing and payment deadlines HERE. The recent changes are discussed below.
Personal Tax Deadlines
Normally individuals must file their tax returns by April 30th or June 15th if they are self-employed, and in either case, pay any taxes owing by April 30th.
One of the early extensions was of the normal April 30th tax filing deadline to June 1st. In addition, CRA indicated they would not charge any interest or penalties on any personal income tax payments coming due after March 18, 2020, provided they are paid by September 1, 2020.
Recently, CRA clarified that the relief from penalties also applies to late filing penalties. This means that while technically a personal tax return is due on June 1st or 15th, no late filing penalties will be imposed if the balance owing is paid by September 1, 2020.
The waiver of penalties and interest for 2019 personal tax returns and trust returns described above also applies to Form T1135 and any elections, forms or schedules that must be filed with the return, provided that they are filed by September 1, 2020.
The payment of various government benefit plans also may require a current tax return to be filed. The government has indicated that the first payments of the GST rebate and Canada Child Tax Benefit will be paid even if a 2019 return is not filed by June 1, 2020. If the payment is incorrect you would have to repay any excess or wait to receive any increased benefits.
Corporate and Trust Filing Deadlines
A corporation normally must file its tax return within six months of its year-end and pay any balance owing two or three months after its year-end. A trust must file within 90 days of its year-end and pay the balance owing by that date as well.
The early extension offered by CRA allowed corporations and trusts that would normally have to file between March 18thand June 1st to extend their deadline to June 1st, and any payments owing until September 1, 2020. This also applies to elections and forms normally filed with the return that may have separate filing requirements or penalty provisions.
Recently, the deadline for corporations and trusts otherwise having to file in June, July or August was extended to September 1, 2020.
Tax Forms and other Elections
On May 22nd, the CRA also provided an extension for most forms, designations, elections and responses to requests for information. Penalties and interest will not be applied if information returns, elections, designations and information requests are filed and payments are made by September 1, 2020.
CANADA EMERGENCY WAGE SUBSIDY (CEWS)
The CEWS is the wage subsidy that originally offered employers a subsidy of 75% of pre-crisis wages. The program as originally announced applied to those employers who had a 15% reduction in revenue for March 2020 and 30% for April or May 2020. A detailed discussion of the original provisions can be found HERE.
The government recently announced they are extending the CEWS an additional 12 weeks to August 29, 2020. They have also indicated that the requirement to have a 30% drop in revenue may be relaxed or eliminated.
Additionally, several categories of organizations will be made eligible:
- Partnerships that are up to 50-per-cent owned by non-eligible members;
- Indigenous government-owned corporations that are carrying on a business, as well as partnerships where the partners are Indigenous governments and eligible employers;
- Registered Canadian Amateur Athletic Associations;
- Registered Journalism Organizations; and
- Non-public colleges and schools, including institutions that offer specialized services, such as arts schools, driving schools, language schools or flight schools.
Changes may also be made to address seasonal employees.
This calculation of the eligible salaries and the amount of the subsidy can be complicated. We are happy to assist you with the application.
We will continue to provide updates as they come available and are happy to discuss any questions you may have about these matters. To review any of our previous updates on COVID-19 please see our website.
This summary deals with proposed matters that are complex and may not apply to particular facts and circumstances. As well, the material and the references contained therein reflect laws and practices which are subject to change. For these reasons, this material should not be relied upon as a substitute for specialized professional advice in connection with any particular matter.
Although this communication has been carefully prepared, Wilkinson & Company LLP does not accept any legal responsibility for its contents or for any consequences arising from its use. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means (photocopying, electronic, mechanical, recording or otherwise).