Monthly Archives: March 2020

2019 Income Tax Reminder & COVID 19 Update – Tax Filing Deadline Extended to June 1st

March 29, 2020,
Dear Clients & Friends:

Hope you and your families are staying safe amid COVID 19.  Our office is open as one of the essential businesses in Ontario with our staff on a rotating work from home schedule.  With the tax filing deadline extended to June 1^st, please send us your files digitally (either via dropbox, google drive, box or secured email).  We are committed to continue serving you during these challenging times.  Please call me if you have any questions on the government emergency financial measures, your personal taxes or your corporate taxes.

COVID 19 Financial Measures Updates

Prime Minister Trudeau provided a brief update on some further tax measures on Friday March 27, 2020.  Full details will be released later this week and I will update everyone accordingly.  Here are some of the updates that Trudeau and CRA will be providing:

1. For small businesses, the government announced that it would increase the temporary wage subsidy to 75% of eligible remuneration (from 10% that it had initially announced on March 23)
2. Deferral of GST/HST remittances for small businesses.   Although it is still unclear if this applies to the actual filing of the HST returns, taxpayers will now have until June 30, 2020 to make the following payments:
   1. Monthly filers — Remittances collected for the February, March and April 2020 reporting periods.
   2. Quarterly filers — Remittances collected for the January 1, 2020 through March 31, 2020 reporting period.
   3. Annual filers whose GST/HST return or instalment are due in March, April or May 2020 — Remittances collected and owing for their previous fiscal year and instalments of GST/HST for the filer’s current fiscal year.
3. The government will provide interest-free loans of up to $40,000 for one year to eligible small businesses and not-for-profits through the new Canada Emergency Business; with possibly $10,000 of the loan to be forgiven.  Please let me know if you would like me to connect you with the appropriate banking professional to assist you with the process.
4. The Bank of Canada is cutting their interest rates by a further 0.25%.

Please connect on the links to my social media at your convenience (Facebook, Twitter, Linkedin, Instagram) to stay fully updated on COVID 19 and tips and tax planning for individuals and businesses.

CRA & Ontario COVID 19 Update

Dear Clients & Friends,

We wanted to update you on the latest updates from the federal & provincial governments announced yesterday.

1. Federal Government

The full details are in the Link: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-individuals.html#new_canada_emergency_response_benefit

The main change introduced impacting taxpayers are summarized below:

Support for people facing unemployment: The new Canada Emergency Response Benefit

The federal government will provide a taxable benefit of $2,000 a month for up to 4 months to:

• Workers who must stop working due to COVID19 and do not have access to paid leave or other income support.
• Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
• Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
• Workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
• Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
• The Canada Emergency Response Benefit will be accessible through a secure web portal starting in early April. Applicants will also be able to apply via an automated telephone line or via a toll-free number.

2. Ontario Government

The full details are in Link: https://budget.ontario.ca/2020/marchupdate/action-plan.html

The main changes introduced that impact taxpayers and their families are summarized below:

• • $3.7 billion to support people and jobs, including:

    • $75 million in urgent additional support for 194,000 low-income seniors by proposing to double the Guaranteed Annual Income System (GAINS) maximum payment to $166 per month for individuals and $332 per month for couples, for six months starting in April 2020;
    • Helping families pay for extra costs associated with school and daycare closures during the COVID‑19 outbreak by providing a one-time $200 payment per child up to 12 years of age, and $250 for those with special needs including kids enrolled in private schools;
    • Providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief, in coordination with the federal government’s measures, leaving more money in the pockets of student borrowers;
    • Making electricity bills more affordable for eligible residential, farm and small business consumers through a $1.5 billion increase in electricity cost relief compared to the 2019 Budget. The government is also setting electricity prices for time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for 45 days, to support ratepayers in their increased daytime electricity usage as a result of measures to contain the COVID‑19 outbreak;
    • $9 million in direct support to families for their energy bills by expanding eligibility for the Low income Energy Assistance Program (LEAP) and ensuring that their electricity and natural gas services are not disconnected for nonpayment during the COVID‑19 outbreak;
    • Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption;
    • Helping to support regions lagging in employment growth with a proposed new Corporate Income Tax credit — the Regional Opportunities Investment Tax Credit; and
    • Supporting the timely delivery of critical food and supplies by amending a regulation that restricted delivery trucks from operating during off-peak hours.

  • $10 billion in support for people and businesses to improve cash flows by:

    • Providing a five-month interest and penalty-free period to make payments for the majority of provincially administered taxes, providing $6 billion in relief to help support Ontario businesses when they need it the most;
    • Deferring the upcoming quarterly (June 30) remittance of education property tax to school boards by 90 days. This will provide municipalities with the flexibility to, in turn, provide property tax deferrals of over $1.8 billion to local residents and businesses; and
    • Providing $1.9 billion in new financial relief by the Workplace Safety and Insurance Board (WSIB) allowing employers to defer payments for a period of six months.

Please contact us if you have any questions.

CRA Tax Measures Amid Covid-19

Dear Client & Friends:

With the recent pandemic, the Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the COVID-19 outbreak.

On March 18, 2020, the Prime Minister announced a new set of economic measures to help stabilize the economy during this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses.

General support for individuals

1. Increase to the Canada Child Benefit this year

For over 3.5 million families with children, who may also require additional support, the Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child as part of their May payment.

2. Income Tax Filing Deadline Extension

In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the Canada Revenue Agency will defer the filing due date for the 2019 tax returns of individuals, including certain trusts.

For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020. However, the Agency encourages individuals who expect to receive benefits under the Goods and Services Tax Credit or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.

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 today 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.

3. Mortgage Deferral & Support

The Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.

Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products. These targeted measures respond to immediate challenges being faced across the country and will help stabilize the Canadian economy.

Support for Unemployment

1. Improved access to Employment Insurance

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure will be in effect as of March 15, 2020.

2. The New Emergency Support Benefit

For Canadians who lose their jobs or face reduced hours as a result of COVID’s impact, the Government is introducing an Emergency Support Benefit delivered through the CRA to provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.

Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide 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 do not qualify for EI sickness benefits.

Parents with children who require care or supervision due to school or day care closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020 and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two Weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:

• By accessing it on their CRA MyAccount secure portal by accessing it from their secure My Service Canada Account; or
• By calling a toll-free number equipped with an automated application process. The general contact number for Service Canada is 1-800-206-7218.

3. Support for people sick or quarantined Improved access to Employment Insurance Sickness Benefit

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is waiving the requirement to provide a medical certificate to access EI sickness

Support for students and recent graduates

A moratorium on the repayment of Canada Student Loans
The Government of Canada is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.

Business Tax Payment Relief

Businesses can defer the remittance of any income tax payments until September 1, 2020. This measure will apply to income tax balances and instalments owing on or after March 18, 2020 and before September 2020. There will be no interest or penalties payable on these deferred amounts. Please note that this deferral does not apply to GST/HST and employer payroll remittances.

CRA Audits

CRA will not contact any small or medium businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the CRA will temporarily suspend audit interaction with taxpayers and representatives.

Business Credit

The Business Credit Availability Program will allow the Business Development Bank of Canada and Export Development Canada to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.

Temporary Wage Subsidy

Small employers will be entitled to a wage subsidy for three months equal to 10% of remuneration paid during that period, to a maximum subsidy of $1,375 per employee and $25,000 per employer. The subsidies apply for wages paid from March 18, 2020 through to June 20, 2020. Any employee, including family members are eligible

This subsidy is available to corporations who can claim the small business deduction, non-profit organizations and charities. To be eligible, corporations must have had a payroll account with the Canada Revenue Agency as of March 18, 2020 and have had less than $15 million in taxable capital employed in Canada in 2019.

For More Information:

1. Visit our Website: www.arjcpa.ca
2. Visit CRA: https://www.canada.ca/en/department-finance/economic-response-plan.html

We are here to help

We understand this is an uncertain time for you, your family and your businesses; we are here to support you in whatever way we can. We also work very closely with personal and business bankers if you require credit extensions for your personal mortgages or additional business credit.

If you have any questions on your insurance, please email us at ajaffer@arjcpa.ca or clientcare@arjcpa.ca or contact the office at 905-629-7720.

Sincerely,
Ali Raza Jaffer