Around this time of year, employees usually start asking questions about their taxes. This year, both employees and their employers will have questions about tax season.
Due to Covid-19, the Canadian Revenue Agency (CRA) has made several changes to taxes and benefits for both employers and employees.
We’ll go through the key updates and how they affect individuals and businesses.
In addition to going through the various due dates for when taxes are to be filed, we’re also covering some of the changes the CRA are implementing to provide support for businesses and employers.
Income Tax Filing and Payment Dates
For individuals, the filing of income tax has been extended until June 1, 2020. Payment for taxes owed must be paid by September 1, 2020.
Self-employed workers and their spouse or common law partners have not had their due date to file taxes changed. It remains June 15, 2020. However, the payment date has been moved to September 1, 2020.
Corporations, like individuals, have had the due date to file taxes extended until June 1, 2020. The payment date has likewise been extended to September 1, 2020.
Taxes for trusts have been extended to May 1, 2020 if the trusts tax year has an end date of December 31, 2019. If the trust would otherwise have a filing date in April or May, their date has been extended to June 1, 2020. All trusts have a payment date of September 1, 2020.
Charities with Form T3010 due between March 18, 2020 and December 31, 2020 have their filing date extended to December 31, 2020.
Non-residents have their filing date for the 2019 NR4 extended to May 1, 2020. Their payment dates—the 15th of every month—are unchanged.
Support for Employers
Canada Emergency Wage Subsidy
The Government of Canada announced a Canada Emergency Wage Subsidy (CEWS). The subsidy will pay 75% of qualifying employees wages (upto $847 per week) for up to 12 weeks.
For an employer to be eligible to receive the CEWS they must have seen a drop of at least 30% in their revenues for April and May. The rule for March was changed to 15% When applying for the subsidy, employers are required to show evidence of the decline in revenue. The full list of requirements can be found here.
10% Temporary Wage Subsidy
Employers are also eligible to receive a 10% temporary wage subsidy for a three month period. An employer is eligible for the subsidy if they meet the following criteria:
individual (excluding trusts)
Canadian-controlled private corporation eligible for the small business deduction.
Have an existing business number and payroll program account with the CRA on March 18, 2020
Pay salary, wages, bonuses, or other remuneration to an eligible employee.
The subsidy will cover $1,375 for each employee, to a maximum of $25,000 per employer.
The crucial difference in eligibility between the CEWS and this subsidy is that employers are not required to prove that they’ve had a 30% reduction in revenue.
The CRA is allowing all businesses to defer GST/HST payment or remittances until the end of June 2020.
In BC and Alberta, employers with a payroll of over $500,000 can defer their health tax payment until September 30, 2020.
Additionally, the CRA increased the GST rebate amounts for qualified individuals. This one-time supplementary payment is paid out based on an individual's 2018 tax filings. The breakdown of the increase is as follows:
$443 to $886 if you're single
$580 to $1,160 if you're married or living common-law
$153 to $306 for each child under the age of 19 (excluding the first eligible child of a single parent)
$290 to $580 for the first eligible child of a single parent.
We understand the critical importance of being informed at a time like this. With the situation changing daily, we wanted to provide you with a single source for helpful updates related to Covid-19.