The government today announced a number of tax filing and support measures to assist Canadians facing hardship as result of the COVID-19 outbreak. Some main measures are summarized below:
Extended Tax Filing Deadlines
For individuals, the return filing due date will be deferred until June 1, 2020. (However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.) For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
Extended Tax Payment Deadlines
An extension to allow all taxpayers (individuals and businesses) to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18th, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
For businesses and corporations - This applies for income tax only and not for your GST/HST or payroll deductions. Payroll deductions, however, may be reduced with respects with a wage subsidy discussed below.
Wage Subsidy for Small Businesses
To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
BDC (Business Development Bank of Canada) is also offering liquidity support for small and medium sized businesses impacted by COVID-19 with working capital loans and other financing options. See more details on their webpage.
Emergency Care Benefit
For Canadians without paid sick leave, who are sick, quarantined or forced to stay home to care their children, the Government is providing a benefit up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to:
Enhanced GST Credit
For over 12 million low- and modest-income families, who may require additional help with their finances, the Government is proposing to provide a one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC). This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples.
Enhance Canada Child Benefit
the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment.
Canada’s large banks have confirmed that they may on a case by case basis allow for a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
Student Loan Relief
Placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
For Seniors - Reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings.
The full details and including other measures can be found the Department of Finance website here.
Brabant + Kretzschmann, Chartered Professional Accountants
Midland ON, - updated March 18/2020
Our office is open and is continuing to serve our clients during this unprecedented time. However we will be implementing procedures to hopefully limit the risk and possible spread of COVID-19 in our community.
If you have recently been out of the country, or show symptoms of fever, cough or shortness of breath, we ask that you follow Health Canada’s guidelines and self-isolate for two weeks prior to visiting our office and dropping off, or picking up your tax returns.
We are taking precautions with staff and clients health in mind to try and keep the possible spread of COVID19 minimized. This may mean arranging a specific time for you to pick up and sign your returns in order to limit the number of clients visiting the office, arranging a secure dropbox outside the door for you to drop off your tax information, reducing or limiting face to face interactions and meetings and instead arranging telephone calls to discuss specific situations or questions that you may have. We will also look at expanding electronic sharing of information in a secure manner.
On March 18th, 2020, the government made the announcement that the individual tax filing deadline will be extended to June 1, 2020. In addition, the tax payment deadline will be will be deferred to August 31 if you are owing tax. This relief would apply to income tax balances due, as well as instalments, No interest or penalties will accumulate on these amounts during this period.
We want to assure you that we will continue to do our utmost to have your tax returns prepared and completed on time as you would expect and continue to be of service to our clients.