COVID-19 Tax Relief
Filing Date for 2019 tax year: June 1, 2020
Payment date for 2019 tax year: September 1, 2020
Self-employed and their spouse / common law partner
Filing Date for 2019 tax year: June 15, 2020
Payment date for 2019 tax year: September 1, 2020 (Includes the June 15, 2020, instalment payment for those who have to pay by instalments)
Filing Date for 2019 tax year: June 1, 2020 (Applies to corporations that would otherwise have a filing due date after March 18 and before June 1, 2020)
Payment date for 2019 tax year: September 1, 2020 (Applies to balances and instalments under Part 1 of the Income Tax Act due on or after March 18 and before September 1, 2020)
Filing Date for 2019 tax year: May 1, 2020 (Applies to trusts with a tax year end date of December 31, 2019); June 1, 2020 (Applies to trusts that would otherwise have a filing due date in April or May)
Payment date for 2019 tax year: September 1, 2020 (Applies to income tax balances and instalments due on or after March 18 and before September 1, 2020)
Filing Date for 2019 tax year: December 31, 2020 (Applies to charities with Form T3010 due between March 18, 2020 and December 31, 2020)
Payment date for 2019 tax year: not applicable
Non-resident tax due dates
Filing Date for 2019 tax year: May 1, 2020
Payment date for 2019 tax year: The 15th of each month following an amount paid or credited by residents of Canada to non-resident persons.
Support for Businesses
(a) Avoiding Layoffs
Work Sharing (WS) Program
Work-Sharing (WS) is an adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in business activity beyond the control of the employer. The measure provides income support to employees eligible for Employment Insurance benefits who work a temporarily reduced work week while their employer recovers.
Work-Sharing is a three-party agreement involving employers, employees and Service Canada. Employees on a Work-Sharing agreement must agree to a reduced schedule of work and to share the available work over a specified period. The Government of Canada has increased the maximum duration for WS agreements from 38 weeks to 76 Weeks. For employers who have already used the Work-Sharing program, the mandatory cooling-off period is waived so that eligible employers may immediately enter into a new agreement.
- Must be a year-round business in Canada for at least 1 year;
- be a private business, a publicly held company or a not-for-profit organization, and
- have at least 2 employees in the WS unit
- Now includes Government Business Enterprises (GBEs) and not-for-profit employers experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19
Your business is not eligible if it is experiencing a reduction in business activity due to:
- A labour dispute
- A seasonal shortage of work
- A pre-existing and/or recurring production slowdown, or
- The decrease in business activity is due to a recent increase in the size of the workforce
- Must be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business (your “core staff”);
- be eligible to receive EI benefits, and
- agree to reduce their normal working hours by the same percentage and to share the available work
- Now includes employees considered essential to the recovery and viability of the business can now be eligible to participate in Work-Sharing
Employees that are not eligible include:
- Seasonal employees and students hired for the summer or a co-op term
- Employees hired on a casual or on-call basis, or through a temporary help agency
- Employees who are needed to help generate work and/or who are essential to the recovery of the business. For example senior management, executive-level marketing/sales agents, outside sales representatives, technical employees engaged in product development, employees who hold more than 40% of the voting shares in the business.
How to Apply:
Employers are now required to submit their applications ten days before the start date of the agreement. The processing time is roughly ten calendar days.
To apply for the Work-Sharing program, employers must submit:
- Applications for a Work-Sharing Agreement form (EMP5100)
- Attachment A: Work-Sharing Unit form (EMP5101)
For Ontario, please send your application to:
For more information, visit www.canada.ca/en/employment-social-development/corporate/notices/coronavirus and click “Work-Sharing Program”
Temporary 10% Wage Subsidy
The Temporary 10% Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deduction required to be remitted to the CRA. The subsidy is equal to 10% of the remuneration you pay from March 18, 2020, to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. If you do not reduce payroll remittances during the year, then at the end of the year, the CRA will pay the amount to you or transfer it to your next year’s remittance.
The temporary subsidy is separate from the Canadian Emergency Wage Subsidy (CEWS). For employers that are eligible for both the CEWS and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period generally reduces the amount available to be claimed under the CEWS in that same period
You do not need to apply for the subsidy. The subsidy must be manually calculated when you remit these amounts to the CRA. Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy.
If your business is closed and you are not paying salary, wages, bonuses, or other remuneration to an eligible employee from March 18, 2020, to June 19, 2020, you cannot receive the wage subsidy. The subsidy is considered taxable income; the amount received must be reported as part of income. If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future payroll remittances to benefit from the subsidy.
- individuals (excluding trusts),
- non-profit organizations,
- registered charities, or
- Canadian-controlled private corporation (CCPC) (including a cooperative corporation);
- have an existing business number and payroll program account with the CRA on March 18, 2020; and
- pay salary, wages, bonuses, or other remuneration to an eligible employee.
An eligible employee is an individual who is employed in Canada.
Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, other partnerships eligible for the subsidy, or eligible Canadian-controlled private corporations (CCPCs).
CCPCs are only eligible for the subsidy if they have a business limit for their last taxation year that ended before March 18, 2020, greater than nil (determined without reference to the passive income business limit reduction). For more information on whether your CCPC would have a business limit, see Small Business Deduction in the T2 Corporation Income Tax Guide.
For general information, and how to calculate the subsidy, visit www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses
Canadian Emergency Wage Subsidy (CEWS)
The CEWS provides a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020. The CEWS covers employers of all sizes, in all sectors who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May.
The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020, is the greater of:
- 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week, and
- the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less.
In effect, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees. These employers are expected where possible to maintain existing employees’ pre-crisis employment earnings. Employers are also eligible for a subsidy of up to 75% of salaries and wages paid to new employees.
The pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.
Eligible remuneration may include salary, wages, and other remuneration like taxable benefits. These are amounts for which employers are generally required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation. However, it does not include severance pay or items such as stock option benefits or the personal use of a corporate vehicle.
- taxable corporations
- partnerships consisting of eligible employers, non‑profit organizations and registered charities. Those that see a drop of at least 15% of their revenue in March 2020 and 30% for the following months (see Eligible Periods).
Public bodies are not eligible for this subsidy.
An eligible employee is an individual who is employed in Canada.
Also, the Government of Canada has introduced a new 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. The refund covers 100% of employer-paid contributions for eligible employees during each week where those employees are on leave with pay, and the employer is eligible to claim for the CEWS.
An employee is considered on leave with pay if they are remunerated but do not perform any work during a particular week. This refund is not available for eligible employees that are on leave with pay for only a portion of a week.
Employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers apply for a refund, as described above, at the same time that they apply for the CEWS.
How to Apply: Eligible employers will be able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal. For more information, visit: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
(b) Access to Credit
Business Credit Availability Program (BCAP)
The objective of BCAP is to help Canadian businesses obtain financing during the current period of significant uncertainty. BCAP will improve access to funding for credit-worthy Canadian businesses with viable business models, whose access to financing would otherwise be restricted. Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide more than $40 billion at market rates by working in close cooperation with financial institutions.
How to Apply: Begin by contacting your financial institution directly, who will then contact BDC and EDC where appropriate. Alternatively, the BDC and EDC can be contacted directly:
Business Development Bank of Canada – 1-877-232-2269
Export Development Canada – 1-800-229-0575
For more information, visit www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program
Canada Emergency Business Account
The Canada Emergency Business Account is a new loan program implemented by eligible financial institutions in cooperation with Export Development Canada (EDC). The program will provide interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover their operating costs during a period where revenue may be reduced.
A business will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019 to qualify. Repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 percent (up to $10,000).
How to Apply: Begin by contacting your financial institution directly. For more information, visit: www.ceba-cuec.ca
(c) Greater Flexibility for Businesses
Deferral of Sales Tax Remittance and Customs Duty Payments
The Government of Canada will allow businesses, including self-employed individuals, to defer GST/HST payments, as well as customs duties owing on their imports, until June 30, 2020. Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until the end of June. For GST and customs duty payments for imported goods, the deferral will include amounts owing for March, April and May.
Support for Individuals
(a) Support for individuals and families
Temporary salary top-up for low-income essential workers
The Government of Canada is working with provinces and territories through a new transfer to cost-share a temporary top-up to the salaries of low-income workers (those who earn less than $2,500 per month on a full-time basis), that the provinces and territories have deemed essential in the fight against COVID-19.
For example, the salary top-up will apply to front-line workers in hospitals, carers in long-term senior care facilities, or those working to ensure that there is food on our shelves and tables.
More details will be released shortly.
Increasing the Canada Child Benefit Plan (CCB)
The Government of Canada has increased the CCB payment amounts for the 2019/2020 benefit year, to $300 per child. Any increase to your CCB benefit will be delivered as part of the scheduled payment in May. Those who already receive the CCB do not need to re-apply.
How to Apply: You can apply through your CRA account or by mail. For more information, please visit www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-apply.html
Special Goods and Services Tax Credit Payment
For families with a low to moderate level of income, the Government of Canada is providing a one-time payment through the Goods and Services Tax credit (GSTC), available by May 2020. The special payment will double the maximum GSTC payment amounts for the 2019/2020 benefit year. The average boost to income will be close to $400 for single individuals and close to $600 for couples.
How to Apply: There is no need to apply for this special payment. If you are eligible, you will receive it automatically.
Canadian banks have committed to work with their customers on a case-by-case basis to help them manage hardships caused by COVID-19. Canadians who are impacted and experiencing financial difficulty should contact their financial institution regarding flexibility for a mortgage deferral.
Note: For more information, please visit the Canadian Banking Association’s website cba.ca/mortgage-deferral-to-help-canadians-experiencing-financial-hardship-due-to-covid-19.
The Canada Mortgage and Housing Corporation and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty.
Note: For more information, please visit CMHC (www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/the-resource/dealing-with-mortgage-payment-difficulties)
Canada’s mortgage insurers are committed to providing homeowners with solutions to mitigate temporary financial difficulty. Solutions such as permitting lenders to defer up to six monthly mortgage payments (interest and principal) for impacted borrowers. Deferred payments are added to the outstanding principal balance and subsequently repaid throughout the life of the mortgage.
(b) Support for people facing unemployment
Canadian Emergency Response Benefit (CERB)
The Government of Canada is providing a taxable benefit of $500 per week for up to 16 weeks. Those eligible are:
- Residing in Canada, who are at least 15 years old;
- Who have stopped working because of reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits between December 29, 2019, and October 3, 2020;
- Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,
- Who have not quit their job voluntarily.
When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.
When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.
Concerning normal EI benefits, you can apply either for EI or the CERB, but not both.
How to Apply: Get started online at www.canada.ca/en/services/benefits/ei/cerb-application or apply over the phone: 1‑800‑959‑2019 or 1‑800‑959‑2041
Employment Insurance (EI): Regular Benefits
Regular EI benefits continue to apply; however, given the increased volume on Government services, applications may be processed slower than usual.
You may be eligible for EI if you:
- Were employed in insurable employment
- Lost your job through no fault of your own
- Have been without work and pay for at least seven consecutive days in the last 52 weeks
- Have worked for the required number of insurable employment hours in the last 52 weeks or since the start of your last EI claim, whichever is shorter
- Are ready, willing and capable of working each day
- Are actively looking for work (you must keep a written record of employers you contact, including when you contacted them)
In relation to the new CERB, you can apply either for EI or the CERB but not both.
How to Apply: For more information, visit www.canada.ca/en/services/benefits/ei/ei-regular-benefit/apply
Employment Insurance (EI): Sickness Benefits
Separate from EI regular benefits. Sickness benefits are to help those who are sick, quarantined, or have been directed to self-isolate, the Government of Canada has waived the requirement to provide a medical certificate to access EI sickness benefits
To qualify, you must show that:
- You’re unable to work for medical reasons;
- Your regular weekly earnings from work have decreased by more than 40% for at least one week;
- You accumulated 600 insured hours* of work in the 52 weeks before the start of your claim or since the start of your last claim, whichever is shorter
How to Apply: For more information, and how to apply, visit www.canada.ca/en/services/benefits/ei/ei-sickness/apply
(c) Support for Seniors
Reduced minimum withdrawals for Registered Retirement Funds (RRIF)
The required minimum withdrawal from RRIFs is reduced by 25% for 2020.
As of April 16, 2020:
Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.
If you can’t pay your taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments in full, payment arrangements are available.
Collections staff will address pre-existing situations on a case-by-case basis to prevent financial hardship.
Our Debt Management Call Centre service is not currently available.
If you need to contact a Collections Officer, please call our toll-free number at 1-800-675-6184 between 8 am and 4 pm your local time.
The CRA will generally not contact small or medium (SME) businesses to initiate any post-assessment GST/HST or income tax audits until further notice.
Interaction with taxpayers will be limited to high risk and exceptional cases, or cases of high-risk GST/HST refund claims which require some contact before they can be paid out. Other audits are temporarily suspended.
For more information, visit: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/changes-your-business/business-audits.html
Objections related to Canadians’ entitlement to benefits and credits have been identified as a critical service and will continue to be delivered during COVID-19. There should not be any delays with the processing of these objections.
For objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance. No collection action will be taken concerning these accounts at this time.
For objections that are due March 18, 2020, or later, we are effectively extending the deadline to June 30, 2020.
For appeals before the Tax Court of Canada (TCC), the TCC has ordered the extension of all timelines prescribed by the rules of that Court while it is closed for business until March 30, 2020. More information can be obtained directly from the TCC.
Taxpayers who are unable to file a return or make a payment by the tax-filing and payment deadlines because of COVID-19 can request the cancellation of penalty and interest charged to their account. Penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met.
Once business operations resume, the Taxpayer Relief Program will review requests related to COVID-19 on a priority basis.
Covid 19 is changing our lives and we all need to work together to get through this very challenging time.
Instead of focusing on the negative I thought that I should use my knowledge of tax to help people with questions and concerns to provide reassurance that based on recent government pronouncements and current laws we will get through these tough economic times.
As of right now, the Canadian Government has stated that CRA will delay tax filing deadlines for individuals to June 1, 2020, and for trusts to May 1, 2020. In addition, all taxpayers that owe income tax balances and income tax instalments on or after March 18, 2020, and before September 2020 will now have until September 1, 2020, to remit these amounts. Further, Canada will provide a temporary wage subsidy to help small businesses retain employees and an Emergency Care Benefit to offer financial support to affected individuals.
There are still many unanswered questions. For instance, payroll and HST remittances have not been delayed. If your business is not incorporated, will you get a wage subsidy relief? Will the Government provide clear guidance to the CRA not to shut down businesses who cannot pay their taxes? I am confident that the Government will address these issues in time given the rapid development of this disease.
Further, even without the recent accommodations, the CRA has tools, such as fairness to remove interest and penalties.
I think that all of us have a role to play to help, be it large or small. In this vein, I would like to offer my services for free to answer any of your tax questions to help you navigate through this tough time.
Radnoff Law Offices has implemented safety protocols to enable us to continue to provide timely, effective and quality legal advice and services. Our physical office is closed to visitors however our staff are working remotely to continue to assist our clients.
If you have any questions. Please e-mail me at email@example.com. I will endeavour to answer your questions within 24 hours or less.
All the best, practice social distance, wash your hands frequently and most of all keep you and your family/friends safe.
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We’re offering our services for free to answer any tax-related questions you may have as it relates COVID-19 tax relief.