CRA Tax Measures Amid Covid-19
Category : blog
Dear Client & Friends:
With the recent pandemic, the Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak.
On March 18, 2020, the Prime Minister announced a new set of economic measures to help stabilize the economy during this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.
General support for individuals
1. Increase to the Canada Child Benefit this year
For over 3.5 million families with children, who may also require additional support, 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 as part of their May payment.
2. Income Tax Filing Deadline Extension
In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts.
For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. However, the Agency encourages individuals who expect to receive benefits under the Goods and Services Tax Credit 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.
The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today 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.
3. Mortgage Deferral & Support
The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.
Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products. These targeted measures respond to immediate challenges being faced across the country and will help stabilize the Canadian economy.
Support for Unemployment
1. Improved access to Employment Insurance
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure will be in effect as of March 15, 2020.
2. The New Emergency Support Benefit
For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is introducing an Emergency Support Benefit delivered through the CRA to provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.
Introducing the Emergency Care Benefit providing 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:
Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits.
Parents with children who require care or supervision due to school or day care closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.
Application for the Benefit will be available in April 2020 and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two Weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:
- By accessing it on their CRA MyAccount secure portal by accessing it from their secure My Service Canada Account; or
- By calling a toll-free number equipped with an automated application process. The general contact number for Service Canada is 1-800-206-7218.
3. Support for people sick or quarantined Improved access to Employment Insurance Sickness Benefit
For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the requirement to provide a medical certificate to access EI sickness
Support for students and recent graduates
A moratorium on the repayment of Canada Student Loans
The Government of Canada is 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.
Business Tax Payment Relief
Businesses can defer the remittance of any income tax payments until September 1, 2020. This measure will apply to income tax balances and instalments owing on or after March 18, 2020 and before September 2020. There will be no interest or penalties payable on these deferred amounts. Please note that this deferral does not apply to GST/HST and employer payroll remittances.
CRA will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.
The Business Credit Availability Program will allow the Business Development Bank of Canada and Export Development Canada to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.
Temporary Wage Subsidy
Small employers will be entitled to a wage subsidy for three months equal to 10% of remuneration paid during that period, to a maximum subsidy of $1,375 per employee and $25,000 per employer. The subsidies apply for wages paid from March 18, 2020 through to June 20, 2020. Any employee, including family members are eligible
This subsidy is available to corporations who can claim the small business deduction, non-profit organizations and charities. To be eligible, corporations must have had a payroll account with the Canada Revenue Agency as of March 18, 2020 and have had less than $15 million in taxable capital employed in Canada in 2019.
For More Information:
- Visit our Website: www.arjcpa.ca
- Visit CRA: https://www.canada.ca/en/department-finance/economic-response-plan.html
We are here to help
We understand this is an uncertain time for you, your family and your businesses; we are here to support you in whatever way we can. We also work very closely with personal and business bankers if you require credit extensions for your personal mortgages or additional business credit.
Ali Raza Jaffer