LHPC Summary of COVID-19 Relief Measures
Please find below an update to our earlier brief on the recent amendments to the relief measures announced by the various levels of government to ease the impact of the state of emergency declared as a result of the COVID 19 pandemic.
These measures continue to be adjusted and added to, therefore it is advisable to check the Canada.ca website and please feel free to call if you have questions, want clarification or how and what to submit.
For Canadian Taxpayers
- Extension of personal tax filing deadline to June 1st
- Any amounts owing in income tax will be due September 1, 2020.
- Installments owing after March 15, 2020 are now due September 1st, 2020.
- No interest and penalties will be due if amount owing under points 2 and 3 above is paid September 1, 2020.
- Tax filing deadline for self employed individuals remains June 15, 2020 but any amounts owing would be due September 1, 2020. It is worth noting that the method of calculating the installments due has not been changed by any of the measures.
- For those with refunds or receive Canada Child Care benefits you are encouraged to file as quickly as possible.
- For those being assessed and are being audited for Income Tax (Part I Tax) or HST /GST (Excise tax Part IX Tax) the moratorium is extended to May 1st and you would not be contacted by anyone from CRA during this period.
- For those who must withdraw or convert their RRSPs into Registered Income Fund –RRIF – the amount of required withdrawal has been reduced by 25% for 2020.
- For RRSP withdrawals bankers advise that they are still required to withhold tax.
For Families and Students
- There is a six- month moratorium on student loans with no interest accruing and no payment due.
- Canadian banks now allow for deferment of mortgage payments for up to 6 months.
- Same deferment may be available for personal loans.
- Some banks will allow to skip a credit card payment. Major banks have agreed to reduce credit card interest rate but at time of writing it is not clear if it is on a case by case basis. It is best to check with your bank and check their websites.
- Interest will continue to accrue for points 2,3,4 but it provides for cash flow availability.
- For families with young children there is a one time top up in Canada Child Benefit in amount of $300 per child which will be available in April 2020 and an HST/GST top up of a one-time payment of $400 for an individual and $600 for a couple. It is expected that these top ups will be automatically added to the payments made to current recipients in May 2020.
- EI – for those who are resident of Canada and who are more than 15 years of age and had income greater than $5,000 in the last year and who lost their job or involuntarily stopped working because of COVID they are eligible for a temporary emergency measure of $500 per week for 16 weeks .
- Please visit www.canada.ca/en/services/benefits/ei.html for more details and portal access to application.
- The Government is funding through the United Way local organizations to help support seniors with delivery of groceries, meals and connecting them with local community support especially for those seniors with no access to technology since Service Canada offices are closed.
For Businesses, Not for Profits and Charities
- The government will provide a temporary wage subsidy for a period of three months equal to 75% of pay to a maximum what would be $847 per week for business who demonstrate that there has been a drop in the revenues by 30% or more for same time period last year. Please note the subsidy is for wages paid March 15 to April 14 , April 15 to May 14,May 15 to June 14 . At time of writing it is expected that business demonstrate the 30% decline in ordinary revenues ( excluding capital gains ) on a monthly basis for the subsidized period.
- The business will have to provide supporting documentation and the subsidy will be paid by direct deposit to the business bank account. Applications for the subsidy must be completed via CRA website: MYBUSINESS ACCOUNT
- Hon Minister Morneau said in an interview with CBC and in response to press queries that consideration is being given to address the “how to” for those businesses who started in the past year or have a seasonal business. At this moment businesses not eligible for the 75% subsidy can claim a 10% subsidy through lower payroll remittances. This subsidy applies to wages paid March 18 to June 20, 2020.
- Corporate income tax filing deadline for those with March 17 to May 31, 2020 deadline will now have to June 1st to file. Any amounts due or installments due will now be due after August 31, 2020.
- CRA will now suspend any audit interaction with Small and Medium Enterprise (SME) owners until May 2020.
- The Government working with the banks and credit unions will be providing a government guarantee of 100% up to $40,000 for businesses who need emergency relief. The government will guarantee up to 80% of loans given under this Covid-19 relief measures to larger enterprise. This measure is not available to public companies.
- There is no deferment of payroll filing deadlines: while the income tax withheld can be deferred until September 1, 2020 the CPP and EI portions are still due as scheduled.
- GST/HST payments due for February, March, April are now due June 30, 2020.
- Customs and Duties and GST on imported goods for March, April and May are deferred to September1, 2020
- Farm credit Canada is providing access to credit, some of the deferral for producers, agri-business and food processors there is a deferral of principal and interest for six months or deferral of principal payments for 12 months and access to additional credit lines on an individual basis .
The T3010 return due March 17 through the end of the year the filing deadline is now Due December 31, 2020
For trusts with a December 31st year ends the filing deadline has been extended from March 31st to May 31st ,2020. For Trusts with April or May year ends the deadline has been extended to June 30, 2020
- Ontario has implemented a five -month (April 1 to August 31st, 2020) interest and penalty deferral of most provincially administered / collected taxes these include EHT, Insurance, tobacco, beer, wine, mining and retail sales tax. Furthermore,
They have also waived the documentation that would normally be required for delays or deferments.
- WSIB payments can be deferred for six months. No interest and no penalties will be accruing. WSIB will continue to cover eligible employees
For US taxpayers
The IRS has extended the deadline for payment of amounts owing up to $1MM by 90 days to July 15, 2020. New York State has extended its deadline as well to match the Federal Government.
A gentle reminder for individual taxpayers must do one of the following to take advantage of the deferred payment due date:
- For US taxpayers living and working in USA they must request an extension to file their individual tax returns before April 15, 2020
- For US taxpayers living and working outside USA they must extend their individual tax return on or before June 15, 2020
Alternatively, taxpayers can file their individual income tax (Form 1040) before June 15, 2020.
For help navigating through the information or for questions as to how any measures impact your situation please call us.
We continue monitor daily the health of our team and practice two- meter apart process between staff members and staff member and client. We have re-arranged our reception area to allow for clients the comfort and security of signing documents in a sanitized space.
We remain available to answer questions by phone, email or in person by appointment. We can arrange for courier pick up of your documents or you can scan or take pictures of your tax documents and email them to us.
We will keep you apprised of any new developments in this extraordinary time.
In the meantime, we wish you safety and wellness.
Rima Hindo, MBA, CPA, CA, Kevin Letourneau, CPA, CA
John Russell, BA
905 371 2300