COVID-19: Relief for Taxpayers and Businesses

Help is on its way for individuals and businesses that are facing difficult financial times due to the COVID-19 virus.  The Prime Minister has made a number of announcements this morning.  Let’s walk through some of the announcements:

Flexibility for Taxpayers

  • The deadline for filing your 2019 personal income taxes has been deferred from April 30, 2020 to June 1, 2020. The filing deadline for self-employed individuals remains at June 15, 2020.
  • For trusts having a taxation year ending December 31, 2019, the return filing due date will be deferred until May 1, 2020
  • Taxpayers will also be allowed to defer the payment of any income tax amounts that come due after March 18, 2020 to September 1, 2020.

Note that individuals who expect to receive benefits under the Goods and Services Tax/Harmonized Sales Tax credit or the Canada Child Benefit should not delay the filing of their tax returns to ensure their entitlements for the 2020-21 benefit year are properly determined.

While the deferral of filing dates and payment dates are welcomed, we encourage you to send your personal tax information to us as soon as possible so that we can prepare your returns.  We are continuing to work toward the normal deadlines for all of our trust and personal tax files to cause as little disruption as possible to our regular corporate work during April and May.

Flexibility for Businesses

  • For businesses, the CRA will allow the deferral of the payment of any income tax amounts that come due after March 18, 2020 until September 1, 2020. This relief applies to income tax balances due as well as instalments.  No interest and penalties will accumulate on these amounts during this period.
  • We assume that this deferral will also apply to provincial corporate taxes collected by Canada Revenue Agency, but this is not entirely clear from the announcement released by the Government.
  • Note that this deferral does not apply to unpaid corporate tax for returns that are not yet due, but where the final instalment deadline has passed.
  • This deferral also does not appear to apply to Part IV tax (tax on dividends received from other than connected corporations).
  • Note that the deadlines for GST/HST remittances and payroll remittances do not appear to have been changed.

Temporary Wage Subsidy

  • The government is proposing to provide eligible small employers with a temporary wage subsidy for a period of three months to help prevent layoffs and to support businesses that are facing revenue losses. 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.  The details of how this subsidy will be implemented have not been finalized at this point in time, but it appears that payroll remittances may be able to be reduced on your next remittance
  • If you use a payroll service, we suggest contacting them to determine how you will receive the subsidy

Business Credit Availability Program

  • This program was established to provide more than $10 billion additional support to small and medium-sized businesses through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
  • The options are:
    • Small business loan: up to $100,000 can be obtained online
    • Working capital loan: for loans over $100,000 and can support everyday operations.
    • Purchasing order financing: loans to fulfill domestic or international orders.

For more details of the announcement click on Announcement.

If you have questions on how these announcements impact you and/or your business, please connect with Lott & Company.  We are here to help as your trusted advisor.