The Canada Revenue Agency (CRA) has just announced it will be extending the personal tax deadline as a result of COVID-19. The new tax filing deadline for personal tax returns is now June 1, 2020. The new due date for taxes payable related to the 2019 T1 tax filing is now August 31, 2020.
While the extended deadline provides much-needed relief in these hectic times, it is important that we stay diligent in filing your personal income tax returns. Please note the following:
- It is our intention to complete all tax returns by April 30, notwithstanding the extended deadline.
- Personal tax organizers were distributed last week. If you did not receive one, you can access it here. The personal tax organizer provides us with the information that is critical to filing your tax return in an expeditious manner.
- Segal has debuted its new online portal for collecting documents. If you have anything to send to your Segal advisor- your tax organizer, supporting tax documents, etc.- we ask that you please scan and upload them. The portal is fast, safe and secure, and a particularly important tool to have in reducing the spread of COVID-19. Those packages sent electronically will be processed quicker than those sent as paper packages.
Some other highlights from CRA’s announcement include:
- 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 March 18, 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.
- CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 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 the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
In addition to CRA changes, the Canadian government announced its COVID-19 Economic Response Plan, which will provide up to $27 billion in direct support to Canadian workers and businesses. We have listed some of the highlights below.
- Temporary Income Support for Workers and Parents
- Waiving the one-week wait period for individuals in imposed quarantine to claim Employment Insurance (EI) sickness benefits
- Waiving the requirement to provide a medical certificate to access EI sickness benefits
- Introducing the Emergency Care Benefit of up to $900 bi-weekly, for up to 15 weeks. This benefit provides 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 who do not qualify for EI sickness benefits
- Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not
Income Support for Individuals Who Need It Most
- A one-time special payment by early May through the GSTC. The payment will double the maximum annual GSTC payment amounts for the 2019/2020 benefit year. The average boost will be close to $400 for single individuals and $600 for couples.
- An increase in the maximum annual CCB payment amounts for the 2019/2020 benefit year by $300 per child. Affected families will receive the increase as part of their May payment.
- Additional measures include the following:
- Providing $305M for a new distinctions-based Indigenous Community Support Fund to address the immediate needs in First Nations, Inuit and Métis Nation communities
- Six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans
- Reducing the required minimum withdrawals from RRIFs by 25% for 2020 in recognition of volatile market conditions
- Providing $157.5M to the Reaching Home Initiative to continue to support people experiencing homelessness during the COVID-19 outbreak
- Supporting women and children fleeing violence, by providing up to $50M to shelters and assault centres to help with their capacity to manage or prevent an outbreak in their facilities.
Helping Business Keep their Workers
- To support businesses facing revenue losses and to help prevent layoffs, the government is proposing to provide eligible small employers with a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% or remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Businesses will immediately benefit from this support by reducing their remittances of income taxes withheld on their employee’s remuneration. Businesses eligible for the small business deduction, as well as non-profit organizations and charities will be eligible for this benefit.
Ensuring Businesses Have Access to Credit
- The Business Credit Availability Program will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10B of additional support to small and medium-sized businesses. BDC and EDC are cooperating with private sector lenders on credit solutions for individual businesses, including in sectors such as oil and gas, air transportation and tourism. Farm Credit Canada will also provide support to farmers and the agri-food sector.
- The office of the Superintendent of Financial Institutions is lowering the Domestic Stability Buffer effective immediately. This will allow Canada’s large banks to inject $300B of additional lending into the economy.
- The Bank of Canada cut interest rates by 0.75% as a proactive measure in light of the impact of COVID-19 on the Canadian economy.
We encourage you to read the full report here in case you and/or your business may benefit from this.
We appreciate your continued support. If you have any questions, please do not hesitate to reach out to us. questions, please do not hesitate to reach out to us.