UPDATED:   April 07, 2021,  09:24 AM MDT

Summary of  recent major updates relating to COVID Support:

3/22/2021: CEBA Extended till June 30, 2021

2/9/2021:  CPA Canada is in discussions with CRA and have expressed its concerns on tax filing deadlines although CRA confirmed through a news release on February 9, 2021 that “CRA has not extended the tax filing deadline.”.

2/9/2021: Self-employed individuals whose net self-employment income was less than $5,000 and who applied for CERB will not be required to repay the CERB as long as the gross self-employment income was at least $5,000.

2/9/2021: Individuals with taxable income of $75,000 or less in 2020 will not be required to pay interest on any outstanding income taxes owing until April 30, 2022.

1/26/2021: Highly Affected Sectors Credit Availability Program (HASCAP) [ Available until June 30, 2021] released.  This program is intended for business sectors that have been hit hard by the pandemic lie restaurants, tourism and hospitality sectors and other business that rely on in-person services.  This loan will provide  a  4% interest loan for up to 10 years.

2/10/2021:  Canada Recovery Benefit (CRB) application opened where an eligible applicant, who are self-employed and their revenue reduced by more than 50%,  and do not qualify under the EI program, can qualify for $500/week ($450/week after tax withholding) for upto 26 weeks.

10/9/2020:  CEWS extended till June 2021.

10/5/2020:  Applications opened for  Canada Recovery Caregiving Benefit (CRCB) and Canada  Recovery Sickness Benefit (CRSB)  opened.  CRCB provides income support for individuals who provide care support to  children under 12 years or family members  who require supervised care.  CRSB provides income support to individuals  who are sick and need to isolate. It provides $500/week with an additional one week if eligible.

6/15/2020:  CEBA Loan expanded and businesses who did not qualify under Payroll requirement may be eligible under Non-deferrable  expense stream..

Since March 18, 2020, when the Federal Government released Canada’s Economic Response Plan to assist Canadians against the escalating Covid-19 pandemic, there has been a flurry of announcements , clarifications and new legislations as well.   Details on some of these relief measures are still in the works and clarifications  regarding administration of these benefits are expected in the future   Major items from the Federal  and Alberta Government’s  economic support announced till date include:

FOR INDIVIDUALS RE: TAX COMPLIANCE RELIEF

2020 personal tax return filing due date     No income tax filing extension announced as at February 9, 2021.

• Any personal tax amount owing .  If you received any COVID benefits and your taxable income is below $75,000, then interest will not be charged on any outstanding taxes till April 30, 2022.
• CRA will continue to recognize electronic signatures on Form T183 so that tax documents can be signed remotely.

FOR BUSINESS RE: TAX COMPLIANCE

Federal corporation income tax amounts owing .  There are no deferral on any corporate income taxes owing  after September 30, 2020.

• Federal Corporation Income tax filing due date   There are no filing extensions for corporations with filing due date after August 31, 2020.
• Alberta Corporation Income tax filing due date There are no filing extensions for corporations with filing due date after August 31, 2020.
• Payroll taxes owing.   Payroll tax payments remain unchanged.  Payment relief for payroll is not expected as it is withheld from other taxpayers.
• [Alberta] Any Alberta Corporation income tax amounts owing ( including tax balances and Instalments ) on or after March 18  are also extended to September 30, 2020.
• GST return filing due date remains unchanged.  Any Federal GST/HST amounts owing ( including tax balances, Installments ) on or after March 18 will be deferred until June 30, 2020.
• T3 Trust returns, Partnership returns (T5013) and NR4 Statements of amounts paid or credit to non-residents are required by May 1, 2020.
• T3010  Charities – Filing due between March 18, 2020 and December 31, 2020 is extended to December 31, 2020.

FOR BUSINESSES RE: ECONOMIC SUPPORT

• Canada Emergency Wage Subsidy will provide wage subsidy to eligible employers for wages paid  for period between March 15, 2020 to  June 30, 2021.   

Who is eligible? –   Most employers (including Individuals,  most partnerships, taxable corporations, non-profits and registered charities) who see a decline in their revenue and had a payroll account registered with Canada Revenue Agency as of March 15, 2020.    Eligible remuneration may include salary, wages and other remuneration for which employers would generally be required to withhold & remit payroll taxes to CRA.  For new start ups, the eligibility will be determined by comparing monthly revenue to the average of January and February 2020 revenue.

Period of coverage: The subsidy can be applied for eligible remuneration paid for following  periods based on decline in the revenue in the reference month :

Period 1 – March 15 to April 11, 2020 – ( 15% Revenue drop  – March 2020 compared against March 2019 or Jan/Feb 2020 average)

Period 2 – April 12 to May 9, 2020 – (30% Revenue drop in April 2020 )

Period 3 – May 10 to June 6, 2020 – (30% Revenue drop in May 2020)

Period 4 –  June  7 to July 4, 2020 – (30% Revenue drop in June 2020)

Period 5 –  July  5 to August 1 2020 – ( Decline in June or July 2020 revenue  )

Period 6 –  August  2 to August 29 2020 – ( Decline in July or August 2020 revenue  )

Period 7 –  August 30 – Sept 26, 2020 – ( Decline in August or September 2020 revenue  )

Period 8 –  September 27 –  Oct 24, 2020 – ( Decline in September or October  2020 revenue  )

Period 9 –  October 25 –  November 21, 2020 – ( Decline in October or November  2020 revenue  )

Period 10 –  November 22 –  December 19, 2020 – ( Decline in  November or December 2020 revenue  )

Period 11 –  December 20 –  January 16, 2021 – ( Decline in November or December 2020 revenue  )

Period 12 –  January 17 –  February 13, 2021 – ( Decline in December 2020 or January 2021 revenue  )

Period 13 –  February 14 –  March 13, 2021 – ( Decline in January or February 2021 revenue  )

Period xx –  ending June 30, 2021 – (TBA)

How is the drop in revenue calculated?: Eligible employers who see a drop in revenue of 15% for March and 30% for April or May 2020 and greater than 0% from June 2020 onwards when compared against against either  a) the same month in prior year or b) average of their revenue in January and February of 2020 may qualify for CEWS.

The business may use cash or accrual accounting method and the same benchmark (accounting and the comparative ) has to be used for the duration of the program.  Special rules apply for revenue from related parties and when affiliated corporations are involved in revenue calculation.

Amount of subsidy:  The subsidy can be calculated using the CRA online calculator.  This grant will cover up to 75% of the employee’s current pay or average weekly pay between January 1 – March 15, 2020, which ever is more, up to a maximum of $847 per week per employee.     Employee “A” who used to be paid $1,500/week before the crisis is hired back for a revised pay of $900,  So the subsidy for his salary will be the full $847/week rather than 75% of the new pay).   Special rules apply for salary to related party employee.  The subsidy for each claim period must be paid to the employee before applying for the subsidy.

How to apply:  Application for eligible employers can be done through a) CRA’s My Business Account b) by  us as your Authorized Representative or c) through CRA web portal.  Businesses can now also requested adjustments to applications already submitted .

• Canada Emergency Business Account (CEBA) provides loan up to $60,000  [Deadline extended to June 30, 2021] – Eligible businesses may access interest-free loan of upto $60,000.  CEBA Applications must be completed at your primary financial institution by June 30, 2021.

Eligibility?    The loan is available for Canadian business operating as of March 1, 2020 and  either a) has 2019 payroll of  $20,000 to $1.5 million or b) have non-deferrable expenses of between $40,000 – $1.5 million and have filed 2018 or 2019 tax returns.

• Upto $20,000 may will be forgiven if the loan is repaid by December 31, 2022.
• • Any unpaid balances as at December 31, 2022 will be converted to a three-year term loan at 5% interest.
  • This loan cannot be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payment of dividends, distributions and increases in management compensation.

Canada Emergency Rent Subsidy (CERS)  This subsidy provides financial assistance to businesses, non-profit organizations or charities  who have seen a drop in revenue.  This subsidy can be claimed directly by businesses without participation of their landlord for commercial rent or property expenses for the period September 27, 2020 until June 2021.

– 10% Temporary Wage Subsidy (TWS)   The 10% wage subsidy is a separate benefit available to employers for wages paid from March 18 – June 19, 2020.   This subsidy is capped off at $1,375 per employee and upto $25,000 for each business.

Who is eligible? – Any employer who may be an individual, non-profit organizations, registered charities or eligible Canadian Controlled Private Corporations (CCPC).   For a CCPC to be eligible, it must be allocated a portion of the small business deduction limit in the prior taxation year.

How is it calculated.  This subsidy is allowable  for 10% of the gross wages paid to all employees which can be reduced  from the payroll source deduction to be remitted to Canada Revenue Agency.  This subsidy will reduce the  75% Canada Emergency Wage Subsidy benefit.

EI working sharing program  is expanded allowing employers  to reduce the work hours for employees with similar job duties for a longer period

• [Alberta] – Alberta 2020 WCB Premiums will be deferred  to 2021.  Private business with less than $10 million in insurable earnings will be eligible for 50% premium reduction.  Any premiums already paid will be refunded automatically.

Canada Emergency Commercial Rent Assistance (CECRA)  [closed] was intended to provide up to 75% rent relief for small businesses for the month of April – September 2020 .

FOR INDIVIDUALS RE: ECONOMIC  SUPPORT

Canada Recovery Benefit Benefit (CRB)  provides income support to individuals employed and self employed individuals who are affected by COVID-19 and are not entitled to EI benefits.  This benefits provides $900 (after taxes) for a 2-week period upto a maximum of 26 weeks between September 27, 2020 and September 25, 2021.

Canada Emergency Response Benefit (CERB)  [ Ended ] On March 25, 2020, The Federal Government announced the Canada Emergency Response Benefit (CERB) which  provided a taxable benefit of $2,000 per month to eligible Workers for period between March 15 -September 26, 2020.

•   Canada Emergency Student Benefit  [closed September 30, 2020] provided financial support to post-secondary students who were unable to work due to COVID-19 and did not qualify for CERB for the claim periods between May 10 to August 29, 2020.  The CESB provided $1,250 per month for eligible students from May through August 2020 and $1,750 for students with dependents and those with permanent disabilities.   {Note: If you were trying to apply for CESB between September 28 to 30, 2020 when CRA’s My Account and automated phone line were experiencing technical issues, you may still be able to apply by speaking to an agent at 1-800-959-8281.  CRA will check their systems records to verify that you tried to apply during that time period]

Low and modest income individuals/families may receive special one-time payments in May 2020 for:

Sources:

CRA COIVD-19 https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html

Department of Finance https://www.canada.ca/en/department-finance/economic-response-plan.html

[Alberta] https://www.alberta.ca/covid-19-support-for-employers.aspx

For additional information ,please feel free to refer to our newsletter or contact us.

WHAT YOU CAN EXPECT FROM US:

• We will be continuing to work on your accounting, assurance and tax matters.
• All of the same email and phone numbers will remain active and we will be communicating by these means throughout this situation.
• Until further notice, we are suspending all in-person face to face meetings
• Our office doors will be open between 10:00 AM to 2:00PM on weekdays.
• For drop-offs, there is a marked box inside the building
• Although we will be delivering most of your tax information through your portal at clienttrackportal.com, Pick-ups can be accommodated at a pre-arranged time.
• Our  clienttrackportal.com will continue to operate, providing the ability to securely send and receive sensitive information.  Please let us know if you need to obtain or reset your log-in information.
• You can also securely upload your documents directly to any of our member at https://www.horizongroupcpa.com/contact/

Disclaimer: Above content is provided for general information only and may not be complete or applicable in certain particular  cases.   Eligibility criteria are also subject to change and hence may not apply at the time of your application.