COVID-19 Tax Update and Our Response
In response to the COVID-19 pandemic, there have been sweeping changes and new tax measures put in place. Below, we have summarized what will impact you most:
Flexibility for Personal Taxes:
The federal filing deadline for personal taxes has been moved from April 30, 2020 to June 1, 2020.
Amounts owing and due will now be deferred to September 1, 2020.
Please note that if you were required to pay instalments relating to 2019, these are not included in the benefit (i.e. September 2019 and December 2019 instalments are still due and subject to interest).
For those that are self-employed, the filing deadline of June 15, 2020 remains unchanged.
ConnectCPA’s response:
We encourage all of our clients to continue to submit documents as soon as possible with the goal of filing for April 30, 2020. As we are well equipped to handle all information digitally, we would like to apply for refunds, GST credits and child benefits for all of our clients. For those that have taxes owing, we would like to provide you with the maximum notice for payments required.
September 2020 Update: As of July 27, 2020 the payment and filing deadline for personal taxes was changed to September 30, 2020 (from June 1 and September 1, as noted above).
Flexibility for Corporations:
Filings have been extended to June 1, 2020 for corporations with an original filing due date after March 18.
Taxes that become due on or after March 18, 2020 will have an extension until September 1, 2020.
Small business owners are able to forgo instalments without penalty until September 1, 2020 at which point they will become due.
ConnectCPA’s response:
As no extension has been afforded, we encourage all clients to continue to complete their bookkeeping and provide the necessary information to our bookkeepers. We will continue to send out instalment reminders. Should you as a business owner choose to wait until September to pay your instalments, it will be your responsibility to track the payment required, but we will update you closer to the time and remind you about payments to be made.
September 2020 Update:
As of July 27, 2020, year-ends with a filing deadline in May, June, July and August have until September 1, 2020 to file their corporate tax returns.
Taxes that become due on or after March 18, 2020 have been further extended to September 30, 2020 (from September 1, 2020 as noted above).
As of July 27, 2020, instalments due for the period of March - August, 2020 are now due September 30, 2020.
Sales Tax (GST/HST, QST, etc.):
No announcements or extensions have been made regarding sales taxes. Currently all GST/HST is still due and payable at the normal time.
Payroll:
The government will provide a temporary wage subsidy for three months. The subsidy will be equal to 10% of renumeration paid per employee up to $1,375 per employee and $25,000 total per employer.
ConnectCPA’s Response:
We are still in the early stages of understanding how this will be rolled out and tracked. We are waiting for clearer guidance from the government and payroll companies. Once a plan is in place it will be communicated to clients wishing to partake in this program. A separate notification will be sent to our payroll clients regarding this subsidy.
September 2020 Update:
Recently the CRA released Form PD27 – 10% Temporary Wage Subsidy Self-Identification Form for Employers. This is required to be filed before filing 2020 T4’s. The form is required for all employers who are eligible for the TWS whether they chose to claim the 10% (or less) subsidy or not. Click here for more information.
Employment Insurance:
The government is rolling out several measures to help those that need it most during this down time. This includes those that may not be eligible for EI typically as they are self-employed. The details regarding these programs have not been released yet, but we will update as information becomes available.
For those that are sick or in quarantine, there is a special EI program to provide temporary income support. There is more information on the government’s website.
We will continue to update you as more information becomes available.
Stay healthy and safe,
The ConnectCPA Team
