Summary of Covid19 measures by Government and our team

Most of the government programs are outlined on the government of Canada website at the following link - Click here for details, however, the following is a summary.

Temporary Wage Subsidy for Employers

The most impactful changes are those for employers under the Temporary Wage Subsidy, however, not all employers will qualify for this.

The original wage subsidy was announced to be a subsidy of 10% of the remuneration paid and was later increased to 75% of the remuneration paid. However, at the time it was increased, there were requirements added to qualify, one of which is that your operations must have experienced a loss of 30% of revenues. This ensures that the subsidy only applies for operations that require the subsidy to allow them to continue to employ their staff and workers. The details of how this test will be administered are the details we are awaiting and expecting over the next few days.

Originally, when the subsidy was at 10%, the subsidy was to be administered through a reduction in the payment of payroll remittances, however, now that the amount has been increased to 75% of the remuneration paid, it is unclear whether the same administration will apply as the remittance amount would not cover the full amount of the subsidy (a carryforward option may apply). As details are released I will work to update you on these releases, however, they should also be updated at the following site. Temporary Wage Subsidy (Still not updated at this hour)

Some of the government programs represent deferrals of the timing of payment of taxes and other amounts. One point I would make on these is that they will become due at a later date, so it will be important to keep track of items you have deferred so their impact can be mitigated when they do come due. If you do take advantage of them to assist with current cash flow, treat them as a debt, similar to a bank loan or line of credit. The key due date changes are as follows:

Deferral of GST/HST Remittances

The CRA will allow all businesses to defer, until the end of June 2020, any GST/HST payments or remittances that become owing on or after March 27, 2020, and before June 2020. This means that no interest will apply if your payments or remittances are made by the end of June 2020. 

 

Individuals – Due dates

Filing date for 2019 tax year - June 1, 2020 extended

Payment date for 2019 tax year - September 1, 2020 extended

Includes the June 15, 2020, instalment payment for those who have to pay by instalments.

 

Self-employed and their spouse or common law partner – Due dates

Filing date for 2019 tax year - June 15, 2020 unchanged

Payment date for 2019 tax year - September 1, 2020 extended

Includes the June 15, 2020, instalment payment for those who have to pay by instalments.

 

Corporations – Due dates

Filing date for current tax year - June 1, 2020 extended

Applies to corporations that would otherwise have a filing due date after March 18 and before June 1, 2020.

Payment date for current tax year- September 1, 2020 extended

Applies to balances and instalments under Part 1 of the Income Tax Act due on or after March, 18 and before September 1, 2020.

 

Trusts – Due dates

Filing date for the current tax year (including the associated T3 information return)- May 1, 2020 extended

Applies to trusts with a tax year-end date of December 31, 2019

June 1, 2020 extended

Applies to trusts that would otherwise have a filing due date in April or May.

Payment date for current tax year- September 1, 2020 extended

Applies to income tax balances and instalments due on or after March 18 and before September 1, 2020

 

Charities – Due dates

Filing date - December 31, 2020 extended

Applies to charities with Form T3010 due between March 18, 2020 and December 31, 2020

Payment date - Not Applicable

There are some benefits that will not require repayment and are simply government injections of financial assistance to those who need it. 

Financial aid offered to individuals are:

 

Canada Emergency Response Benefit

The Canada Emergency Response Benefit provides temporary income support to workers who have stopped working and are without employment or self-employment income for reasons related to COVID-19. The Benefit, in the amount of $2,000, will be paid in blocks of four weeks. A maximum of 16 weeks of benefits can be paid.

Canadians will be able to apply for the new CERB in My Account (you can click this link to access and register if required) or using the automated phone line starting April 6, 2020

 

Goods and services tax/harmonized sales tax (GST/HST) credit payment amounts

The Government will provide a one-time special payment on April 9, 2020. This payment will double the maximum annual GST/HST credit payment amounts for the 2019-20 benefit year. 

You will get the extra payment amount automatically if you normally receive the GST/HST credit and have filed a 2018 tax return.

 

Canada Child Benefit (CCB) payment amounts

The Government increased the maximum annual CCB payment amounts, only for the 2019-20 benefit year, by $300 per child.

The overall increase for families receiving CCB will be approximately $550 on average; these families will receive an extra $300 per child as part of their May payment. In total, this measure will deliver almost $2 billion in extra support.

The government is also allowing those who are retired and normally required by the regulations associated with RRIF’s to withdraw amounts from their retirement savings based on their age to withdraw less while the markets are in this volatile state.

 

Registered Retirement Income Funds (RRIFs) minimum withdrawal

The minimum withdrawal requirement from RRIFs will be reduced by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors' retirement savings.

This will provide flexibility to seniors who are concerned they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements. Similar rules apply to individuals receiving variable benefit payments under a defined contribution registered pension plan and a pooled registered pension plan.

CRA is also suspending collections, audit and other similar functions as detailed in the following link - Collections, audit, objections and appeals.

 

Update on our operations

We have all been impacted in some way by Covid19 and must work together to get through this. This includes social distancing and other measures and many of you will know that this has caused our staff to have to work from home. We are currently working well in this environment, although it did take us a few days to set this up to work effectively and efficiently, days that are not easily gained back during tax season. We are working to recover some of this lost time in order to offer you the same level of service we always have.

If you have already been working with us to complete your personal or corporate tax returns you will also understand the administrative difficulties in gathering your signatures. For this reason, CRA is now accepting electronic signatures as per the following:

Electronic signatures: CRA and COVID-19

Effective immediately, the CRA will recognize electronic signatures as having met the signature requirements of the Income Tax Act. This temporary measure will reduce the necessity for taxpayers and tax preparers to meet in person and will reduce administrative burden during this difficult time.

Secure Client Portal

We have had a Client Portal system for many years to allow us to gather information electronically in a secure manner from our clients and to provide final financial statements and tax returns to our clients in the same secure manner. If you have not established your account and wish to you can contact one of our staff and they will send you a registration email. If you do not have the contact information for the staff member you generally contact you can email reception@jkwhittaker.com and your email will be redirected.

Please, stay safe and take care of your family and friends during this extraordinary time. If you have any questions, please feel free to reach out and we will work with you to help manage and mitigate the impacts Covid19 is having on you and your businesses or entities.