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All our commonly asked questions, procedures, and information you need in one place.
HASCAP offers government-guaranteed, low-interest loans of up to $1 million. Chains and multiple-location businesses could be eligible for up to $6.25 million.
HASCAP is available to all small and medium sized businesses with revenues decrease of 50% due to pandemic.
Terms of loans:
• low interest with a repayment term of up to 10 years
• up to a 12 month postponement of principal payments
• available until June 30, 2021
To be eligible:
• a year-over-year revenue decline of at least 50% in three months, within the eight months prior to their application;
• have previously applied for either CEWS or CERS; and
• have been financially stable and viable pre-COVID
Applications open: February 1,2021
Contact your primary financial institution to find out more.
Note: You can apply at one financial institution only.
CERS would cover part of eligible businesses’ commercial rent or property expenses, starting on September 27, 2020 until June 2021.
This subsidy will provide payments directly to qualifying renters and property owners, without requiring the participation of landlords.
The CERS provides both a base subsidy and, in some cases, a lockdown support amount.
Some of the key points are:
To be eligible to receive the rent subsidy, you must meet all four of the following criteria - you:
1. Meet at least one of these conditions:
a. You had a CRA business number on September 27, 2020.
You will need to set one up if you qualify under b or c
OR
b. You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf
OR
c. You purchased the business assets of another person or partnership who meets condition 2 above, and have made an election under the special asset acquisition rules
OR
d. You meet other prescribed conditions that might be introduced
Note: there are no prescribed conditions at this time
2. Are an eligible business?
Eligible businesses include:
a. individuals (other than a trust)
b. corporations (or trusts)
c. non-profit organizations
d. partnerships consisting of eligible employers
3. Have experienced a drop in revenue?
• The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods. There is no minimum revenue drop required to qualify for the subsidy.
• Revenue calculation methods available:
o Calculate revenues under the accrual or cash method
o And either compare:
Monthly revenue year-over year
Each month with the average of January and February 2020
o Once the method is selected you are required to use the same approach for the entire duration of the program.
• Rate of CERS will depend on the level of revenue decline:
o Base subsidy
o And the Top-up subsidy (Lockdown support)
See CERS rate calculation below.
4. Have eligible expenses?
To apply for CERS, you must have a qualifying property. Only certain expenses you pay for qualifying properties are eligible for CERS.
Maximum eligible expenses per period
• $75,000 per business location (base and top-up)
• $300,000 in total for all locations (including any amounts claimed by affiliated businesses)
o applies to the base subsidy only
o there is no maximum for the top-up subsidy
Expenses eligibility criteria
• Only amounts paid or payable to an arm’s-length party can be included
• The expense must be in respect of the claim period
• The expense must be paid or payable under a written agreement in place before October 9, 2020 (or a renewal on substantially similar terms or assignment of such an agreement)
Eligible Rent Expenses
• Rent (including rent based on a percentage of sales, profit or similar criteria)
• Amounts required to be paid or payable by you under a net lease (either to the lessor or a third party). Includes:
o base rent
o regular payments for customary operating expenses
o property and similar taxes
o regular payments to the lessor for customary ancillary services
Eligible expenses if you own the qualifying property:
• Property and similar taxes
• Property insurance
• Interest on commercial mortgages for the purpose of purchasing real property
o Your mortgage amount cannot exceed the lesser of:
the lowest principal amount secured by one or more mortgages on the property at any time it was acquired
OR
the cost amount of the property
Base subsidy rate:
Your revenue drop | How to calculate your rate |
Revenue drop of 70% or more | The maximum subsidy rate of 65% |
Revenue drop of 50% to 70% | (Your revenue drop - 50%) x 1.25 + 40% (e.g. 40% + (60% revenue drop - 50%) x 1.25 = 52.5% subsidy rate) |
Revenue drop of less than 50% | 0.8 x your revenue drop (e.g. 25% revenue drop x 0.8. = 20% subsidy rate) |
Top-up (lockdown support) Rate
You can receive a lockdown support amount for certain locations affected by public health restrictions.
If you have a 0% base rent subsidy rate, you cannot claim a top up for any location.
Your CERS top-up (lockdown support) rate is 25% on lockdown, calculated as:
• 25% (fixed top-up rate)
• multiplied by days the location was locked down due to the COVID-19 pandemic
• divided by 28 (the days in the CERS period)
• equals Your top-up (lockdown support) rate
E.g. If your location was closed for 15 days due to the lockdown.
25% x (15 lockdown days/ 28 days in CERS period) = 13.39%
You can also use the online calculator to find your revenue drop while calculating how much subsidy you may receive.
Application must be filed no later than 180 days after the end of a claim period.
More details: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html
Applications are open for the new Ontario Small Business Support Grant (up to $20,000), which helps small businesses that are required to close or significantly restrict services under the Provincewide Shutdown effective December 26, 2020.
To receive the grant, a small business must:
• be required to close or restrict services subject to the Provincewide Shutdown effective 12:01 a.m. on December 26
• have fewer than 100 employees at the enterprise level
• have experienced a minimum of 20 per cent revenue decline comparing April 2020 to April 2019 revenues. New businesses established since April 2019 are also eligible provided they meet the other eligibility criteria
If you meet the eligibility criteria apply for this grant here:
https://www.ontario.ca/page/businesses-get-help-covid-19-costs#section-4
1. Property Tax and Energy Cost Rebate Grants for businesses that were required to shut down or significantly restrict services due to provincial public health measures. Provides a rebate to eligible businesses in respect of property taxes and energy bills.
2. Ontario's Main Street Relief Grant providing up to $1,000 for PPE costs to eligible small businesses across Ontario with 2 to 9 employees
Apply here: https://www.app.grants.gov.on.ca/msrf/#/
Eligibility
Support is available for businesses that were required to close or significantly restrict services as a result of provincial modified Stage 2 public health measures announced on October 9, 2020. Going forward, areas categorized as control or lockdown qualify.
- Types of businesses that are eligible for support include:
• restaurants and bars
• gyms, facilities for indoor sports and recreational fitness activities
• performing arts and cinemas
• bingo halls, gaming establishments, casinos, conference centres and convention centres
• community centres, multi-purpose facilities, and museums
• personal care services (with the exception of oxygen bars)
• racing venues
• meeting or event space
• in-person teaching and instruction
- Additional businesses that would become eligible if a region is in lockdown include:
• retail required to close for in-person shopping
• shopping malls
• personal services
• driving instruction
• tour and guide services
• photography services
• campgrounds
- Businesses will not be eligible if they are:
• located outside provincial modified Stage 2 or control and lockdown regions
• within the areas subject to public health restrictions, but were not required to close or significantly restrict services
• owned by the federal, provincial, or a municipal government, or by a person holding federal or provincial office
What you’ll get
- Eligible businesses could get rebates for:
• municipal and education property taxes
• energy costs, including electricity and natural gas (or where natural gas is not available, propane and heating oil)
- Funding will cover the entire length of time that regionally targeted public health restrictions are in place.
What you’ll need to apply
To apply, you will have to submit proof of costs.
• For property tax rebates, this includes your property tax bills
• For energy cost rebates, this includes a digital copy of the first energy bill (including electricity, natural gas, propane or other) you received on or after the day Stage 2 restrictions were put in place in your region. You can also submit other energy bills if your business is heated by propane or heating oil.
Eligibility
To be eligible, your business must have two to nine employees and be in one of the following sectors:
• retail
• accommodation and food services
• repair and maintenance
• personal and laundry services
What you’ll get: one-time grants of up to $1,000.
What you’ll need to apply
You will need to submit receipts or proof of costs for PPE purchased since March 17, 2020. This includes:
• gloves, gowns, face shields, eye protection, masks, sanitizer, sanitizing wipes
• thermometers, temperature monitors or cameras
• physical changes, including the installation of hand sanitizer stations and plexiglass dividers
• signs to guide or inform customers and employees
For a long time, our firm has been using revenue of $100,000 and $200,000 as a general benchmark for deciding whether or not to incorporate. Below $100,000 not, and above $200,000 yes, and anything in between, it depends.
Maybe we should amend our old numbers due to inflation, but the choice is more complicated than that.
1. More to invest after tax
Ontario corporations pay tax at 12.5 % on the first $500,000 of income, while personal income at the top tax bracket above $220,000 is taxed at 53 %.
If you don’t need to spend all your income, the more than 40% in tax savings stays in the corporation and can be used for investment purposes. The fact that PREC can earn investment income in the Corp either investing in real estate or stock portfolio is a great advantage.
2. Possible tax deferral
Corporations pay tax when earned (the accrual basis) and individuals pay tax when received (cash basis). A corporation can choose its first fiscal year end to be any date (as long as its within 53 weeks of incorporating). For this reason, having a July or August year-end, allows for the payment of a year-end bonus that would fall early into the next taxation year personally.
A corporation is allowed to expense a year-end bonus, which is salary to himself when declared, and pay tax personally when received, as long as paid within 6 months. With a PREC you would receive a salary from your own corporation and receive a T4 for personal tax filing purposes.
Another advantage of a summer year end is your accountant will have your year-end done before the end of December, and we may choose to pull some income forward to the current year if there’s an opportunity to declare income in a lower bracket.
3. Income splitting
A spouse, parent or child can own non-voting, non-equity shares and receive dividends which, if they are taxed at a lower rate would reduce the family’s overall tax.
There are rules called TOSI introduced recently that are designed to stop this, but the work around for this to be allowed, is the family member must work a minimum of 20 hours a week.
4. Holding company
A holding company owned by the principle is allowed and if desired, income from the active business (PREC) can pay tax free dividends to the holding company, and eliminate exposure to creditors of the active business. More importantly a holding company for the sale of the business mentioned in point 5 is a big advantage.
5. Lifetime Capital gains exemption (currently $883,384)
The sale of shares of a corporation are eligible for a tax-free capital gain. This would only apply to the agents shares and not the family member(s). The timing of the sale and the payment can be at different times.
Sales are usually not done to the succeeding agent but to his holding company (point 4 above). That way the eventual source of funds, would be a tax-free intercompany dividend from the active company (PREC) to the holding company of the future profits.
Effectively, the purchase is paid with low tax paid profits (taxed at 12.5 %). This would be more likely used by a broker that had a team.
Cost of incorporating and additional accounting fees for corporate filings of $2,000 to $5,000.
For the 2020 tax year, the Canada Revenue Agency (CRA) will be introducing additional reporting for the T4 slip, Statement of Remuneration Paid.
How to report employment income during COVID-19 pay periods
For the tax year 2020, in addition to reporting employment income in Box 14 or Code 71, use new other information codes when reporting employment income and retroactive payments in the following periods:
• Code 57: Employment income – March 15 to May 9
• Code 58: Employment income – May 10 to July 4
• Code 59: Employment income – July 5 to August 29
• Code 60: Employment income – August 30 to September 26
Eligibility criteria for the CERB, CEWS, and CESB is based on employment income for a defined period. The new requirement means employers should report income and any retroactive payments made during these periods.
Example
If you are reporting employment income for the period of April 25 to May 8, payable on May 14, use code 58.
Once you log in, select Manage direct deposit under Payroll:
Log into your business bank account and you see a banner to enroll for direct deposit from the Canada Revenue Agency (you might have received an email from your bank as well)
You will need to enter your payroll account #: 12345 6789 RP000X
Applications open May 15, 2020 via CRA My Account.
IMPORTANT: Sign up for direct deposit through your Financial Institution to get funds faster!
Log into your bank account and you will see a banner to enroll for direct deposit from the Canada Revenue Agency).
For students who expect to complete high school between June 7 to December 31, 2020 – you are eligible for 2 periods only (July 5 to August 1 and August 2 to August 29).
https://www.canada.ca/en/revenue-agency/services/benefits/emergency-student-benefit/cesb-how-apply.html
Benefit:
Deadline: Must apply by September 30, 2020
Conditions:
No interest is payable on any amount owing as a result of an erroneous payment or overpayment.
For information on the Canada Emergency Rent Subsidy: CLICK HERE
CECRA is being replaced with Canada Emergency Rent Subsidy (“CERS”)
New Canada Emergency Rent Subsidy will provide support directly to qualifying tenants and landlords that have been affected by COVID-19.
• Available retroactively from September 27 and will be available until June 2021
• To subsidizes up to 65% of eligible expenses incurred by businesses, charities and non-profits that have suffered a revenue drop, on a sliding scale, similar to the CEWS
• In addition to the 65% subsidy, a top-up subsidy of 25% will be available for organizations temporarily shut down due to a mandatory public health order issued by a qualifying public health authority (such as the measures announced for Toronto, Ottawa and Peel).
Further details to follow.
Your property owner can now opt-in for the September extension for CECRA.
• The September extension is based on the existing program parameters for the April, May and June period.
• You automatically qualify for the September extension without re-assessing a revenue decline for that month, if you are/were eligible for the original period. No additional documents are required.
• A written notice will confirm the extension of your Rent Reduction Agreement. Your property owner must notify you in writing that they have requested the extensions on your behalf.
• New applicants can apply for up to 5 months of rent assistance (from April through August) all at once. Once the initial application is pre-approved, your property owner can opt-in for September.
• This is the final extension of the program.
If your property owner has not yet submitted their application or is still creating it, the deadline to submit new applications is September 30th, 2020.
If your property owner has been approved for rental assistance and wants to opt-in for the extensions only, the deadline to submit the request is October 30th, 2020.
CECRA will be extended by one month to help eligible small businesses pay rent for September. Current CECRA application deadlines will also be extended to accommodate this extension.
If a property owner has been approved for rental assistance and is requesting the July and/or August extension, the deadline to submit the application is September 14, 2020.
o The August extension is based on the existing program parameters for the April, May and June period. No new documents are needed to opt-in.
o Not all tenants in the original application need to be included in the request for the July and/or August extension.
o Property owners can only opt-in once and no new tenants can be added.
CECRA is extended to August for those tenants approved in the April, May, June and July application.
If a business had an average revenue decline of 70% or more in April, May and June, they are deemed eligible for the additional month of rent relief.
If you have been approved for rental assistance and you are applying for the July and/or August extension, your deadline to submit your application is September 14, 2020.
If you have not yet submitted your application or are still creating it, your deadline to submit new applications that include the July and/or August extension is August 31, 2020.
The July Extension Opt-In is Now Available.
If you have previously been approved, you automatically qualify and no additional documents are required. You must log into the portal and opt-in for your impacted tenants.
If you haven’t yet applied for CECRA for small businesses, you can apply for July as part of your entire application.
Application open May 25, 2020.
We aren’t in June yet — should I wait to apply?
No, you must apply for all 3 months at the same time and all impacted tenants must be included on a single application.
Your tenant can use forecasts for the month of June. The eligibility on the 70% factor will be determined on the average of April, May and then, forecasting June revenues.
Source: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business
This program will lower rent by 75% for small businesses that have been affected by COVID-19.
CMHC will provide forgivable loans to eligible commercial property owners.
• The loans will cover 50% of the gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
• The property owner will be responsible for no less than half of the remaining 50% of the gross rent payments (paying no less than 25% of the total).
• The small business tenant will be responsible for no more than half of the remaining 50% of the gross rent payments (paying no more than 25% of the total).
Am I eligible?
Tenants: Contact your landlord
Landlords: To qualify for CECRA for small businesses, the property owner must meet the following requirements:
What is an impacted small business tenant?
Impacted small business tenants are businesses, including non-profit and charitable organizations who:
How do I apply?
Application portal to open later this month
What will you need for your application?
Attestations:
a. Tenant or Sub-tenant Attestation – Click Here for Sample
Each eligible tenant must attest to the meeting the program criteria (see What is an impacted small business tenant).
b. Property Owner’s Attestation – Click Here for Sample
Property Owner tenant must attest to the meeting the program criteria (see Am I Eligible?).
Agreements:
a. Rent Reduction Agreement – Click Here for Sample
Agreement with the eligible tenant to confirm rent reduction based on the program criteria.
b. Forgivable Loan Agreement
Property owner must agree to the terms and conditions outlined here.
What’s the deadline?
The deadline to apply is August 31, 2020.
Can a property owner whose small business is the only tenant apply?
YES, landlords and tenants who are not at arm’s length will be included in the program as long as there was a valid and enforceable lease agreement in place as at April 1, 2020 and the rent under the lease is at market rates.
How can the property owner use the CECRA funds?
In order of priority, funds can be used for:
When is the CECRA loan forgiven?
December 31, 2020.
Source: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business
Recovery Benefits - International Travel
The government indicated that they are changing the eligibility rules so that international travelers who are required to quarantine upon their return to Canada will not be eligible to receive the Canada Recovery Sickness Benefit, the Canada Recovery Caregiving Benefit or the Canada Recovery Benefit during the period of their quarantine. The intended rule is to come into effect retroactively on January 3, 2021.
The CRA has issued FAQs on:
1. Canada Recovery Benefit (CRB)
https://www.canada.ca/en/services/benefits/ei/cerb-application/transition/questions.html
2. Transition to Employment Insurance
https://www.canada.ca/en/services/benefits/ei/cerb-application/transition/ei-questions.html
Employment benefits
1) Commuting
If an employee is working from home because the regular place of employment is closed, the CRA would not consider the employee to have received a taxable benefit where the employer pays for, reimburses or provides a reasonable allowance for commuting costs incurred to allow the employee to travel to their regular place of employment, to, for example, pick up computer equipment or perhaps other office equipment so that they can work from home.
2) Home Office Equipment
CRA will not consider an employee to have received a taxable benefit where the employer pays or reimburses up to $500 of computer or home office equipment to enable the employee to carry out their duties. Amounts in excess of $500 must be included as a taxable benefit.
Disability one-time payment
Deadline to apply for the Disability Tax Credit (DTC): December 31, 2020 extended
Disability Support
You do not have to apply to receive this payment. The CRA expects to issue the payments beginning this fall.
Non-filer benefit repayments
Filing of 2019 personal tax return prior to September is recommended.
Non-filers will have their estimated payments stop in October and may have to repay what was received in July, August, and September 2020.
CERB:
CERB is set to end September 26, 2020
Payment and Interest
Payment due date for current year individual tax returns (including instalments): extended to September 30, 2020.
No further filing deadline extensions
CRA will be waiving interest on existing tax debts related to:
• individual income tax returns from April 1, 2020, to September 30, 2020
• and from April 1, 2020, to June 30, 2020, for HST returns
• one-time, tax-free, non-reportable payment of $600;
• Eligible persons include any who have
o a Disability Tax Credit certificate provided by the Canada Revenue Agency;
o Canada Pension Plan disability benefit or Quebec Pension Plan disability benefit; and
o disability supports provided by Veterans Affairs Canada;
• if you are eligible for the Disability Tax Credit but have not yet applied, you must apply by September 25, 2020.
• Seniors who are eligible for the one-time payment to persons with disabilities would receive a total of $600 in special payments.
Maximum number of periods that can be claimed is 6 four-week periods i.e. 24 weeks
Return or repay CERB if you no longer meet the eligibility via:
• CRA My Account
• Online Banking:
o Sign in to your financial institution's online banking service
o Under "Add a payee" look for an option such as: CRA (revenue) – tax instalment
o Enter your 9 digit social insurance number (SIN) as the CRA account number
• By mail:
o Mail a cheque or money order to the CRA:
o Make the payment out to "Receiver General for Canada"
o Indicate it is for "Repayment of CERB"
o Indicate which eligibility period you are repaying
o Include your Social Insurance Number (SIN) or your Temporary Tax Number (TTN)
o Mail your payment:
Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Pandemic Pay
For front-line workers as part of a temporary pandemic payment to recognize their efforts in the fight against COVID-19 the government is providing:
List of eligible workplaces and workers can be found here: https://www.canada.ca/en/department-finance/economic-response-plan.html
Canada Emergency Student Benefit (CESB)
More details here: https://www.jarvisryan.com/admin/communications/21
https://www.canada.ca/en/department-finance/economic-response-plan.html April 15, 2020
n/department-finance/economic-response-plan.html
Canada Emergency Response Benefit (CERB):
Changes to the eligibility rules to:
Note: you must still meet the criteria: you stopped or will stop working due to COVID-19, and:
For at least 14 days in a row during the 4-week payment period, you do not expect to receive more than $1,000 (before taxes) from employment and self-employment income
You do not expect your situation to change during this 4-week period and you do not expect to receive more than $1,000 (before taxes) from employment and self-employment income
A new temporary salary top-up for low-income essential workers:
The Federal government will work with provinces and territories through a new transfer to cost-share a temporary top up to the salaries of low-income workers (those who earn less than $2,500 per month on a full-time basis), that the provinces and territories have deemed essential in the fight against COVID-19.
More details will be released shortly.
Canada Emergency Response Benefit
To apply for the Canada Emergency Response Benefit via CRA My Account you do not need a security code.
You do not have to live in Canada to qualify but you have to be a tax resident of Canada
Ontario Child Support
Helping families pay for the extra costs associated with school and daycare closures during the COVID-19 outbreak by providing a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools.
If previously registered for the strike days, this will automatically be paid otherwise have to apply.
Apply here: https://www.ontario.ca/page/get-support-families
Other Support Available:
Mortgage: A six- month mortgage deferral program implemented on a case-by-case basis for your primary residence. Contact your bank.
Rent: Discuss alternate arrangements with your landlord, if required. No deferral is mandated however no eviction orders will be issued until further notice.
Property Tax: Payment deferral options vary by municipality, contact your municipality for more information.
Filing and Payment Extension:
2019 tax return: Due June 1, 2020
Any new income tax balances due, or installments, to be deferred until September 1, 2020.
Canada Emergency Response Benefit:
To provide a taxable benefit of $2,000 a month for up to 4 months to:
Apply via CRA My Account - Application will be available April 6th with first payment to start 10 days after application via cheque and 3-4 days via direct deposit.
Canada Child Benefit
An extra $300 per child for 2019-2020 - this benefit will be delivered as part of the scheduled payment in May 2020.
Special Goods and Services Tax credit payment
One-time special payment by early May for low- and modest-income families. Up to $400 for single individuals to $600 for couples.
There is no need to apply for this payment. If you are eligible, you will get it automatically.
You may be eligible to claim home office expenses on your 2020 return as your employer (in line with the rules) is requiring you to work from home. Hopefully for not more than a couple months but while in effect this deduction is available.
In order to claim this deduction, you will need:
Form T2200 Declaration of Conditions of Employment completed and signed by your employer
A summary of related costs you paid for that were not reimbursed for the work from home period. You can deduct the part of your costs that relates to your work space, such as the cost of electricity, heating, and maintenance. However, you cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.
Percentage of work-space-in-the-home i.e. area of the work space divided by the total finished area
New Temporary Flat Rate Method
Eligibility
Days that CAN be Counted
Days that CANNOT be Counted
If you use this simplified method, you don’t have to calculate your work space details or keep supporting documents. Your employer does not have to complete and sign the Form T2200S or Form T2200.
If you have a larger claim, you can still choose to use the detailed method to calculate your employment expenses, get a completed and signed Form T2200S or Form T2200 from your employer and keep documents to support your claim.
New Eligible Expenses
The CRA has expanded the list of work from home eligible expenses to include home internet access fees.
HASCAP offers government-guaranteed, low-interest loans of up to $1 million. Chains and multiple-location businesses could be eligible for up to $6.25 million.
HASCAP is available to all small and medium sized businesses with revenues decrease of 50% due to pandemic.
Terms of loans:
• low interest with a repayment term of up to 10 years
• up to a 12 month postponement of principal payments
• available until June 30, 2021
To be eligible:
• a year-over-year revenue decline of at least 50% in three months, within the eight months prior to their application;
• have previously applied for either CEWS or CERS; and
• have been financially stable and viable pre-COVID
Applications open: February 1,2021
Contact your primary financial institution to find out more.
Note: You can apply at one financial institution only.
Apply here: https://www.bdc.ca/en/financing/business-loans/pages/small-business-loan.aspx
Before applying for CEBA 2.0 (extra 20,000) note the following changes:
CEBA – checking status of your application
As of December 14, 2020, a new status-checking website is available:
https://status-statut.ceba-cuec.ca/
CEBA forgivable portion of loan of $10,000 should be included in income in the year in which the loan is received. Or elect not to include the forgivable amount in its income by reducing its outlay or expenses. Amounts that are not forgiven can be deducted for the year in which the repayment is made.
CEBA – personal accounts
On October 26, 2020 the government announced that CEBA will be available to businesses that have been operating out of a non-business banking account.
To be eligible, businesses must:
The deadline to apply for CEBA is December 31, 2020.
Program expanded to provide an additional interest-free loan of up to $20,000.
Another $10,000 of this new loan would be forgivable, if repaid by December 31, 2022.
The application deadline: extended to December 31, 2020.
More details on this change, including the application process, are expected soon.
Deadline for CEBA applications is extended from August 31 to October 31, 2020.
Expanded program available June 26, 2020.
Expanded program which was to commence June 19, 2020 was put on hold. Updates to come.
Program will be expanded to:
To qualify, these applicants with payroll lower than $20,000 would need:
Apply via your bank
Canada Emergency Benefit Account (CEBA) $40,000 including $10,000 Grant |
10% Wage Subsidy |
Canada Emergency Wage Subsidy (75% Subsidy – CEWS) |
Canada Emergency Response Benefit (CERB) |
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Dec 8, 2020 - Application deadline: March 31, 2021 (extended) - Applications for the additional $20k now available via your bank (if you qualified for the $40K, you can now apply for the additional $20K)
October 27, 2020 - CEBA forgivable portion of loan of $10,000 should be included in income in the year in which the loan is received. Or elect not to include the forgivable amount in its income by reducing its outlay or expenses. Amounts that are not forgiven can be deducted for the year in which the repayment is made. - CEBA – personal accounts - On October 26, 2020 the government announced that CEBA will be available to businesses that have been operating out of a non-business banking account. - To be eligible, businesses must:
- The deadline to apply for CEBA is December 31, 2020. October 13, 2020 - Program expanded to provide an additional interest-free loan of up to $20,000. - Another $10,000 of this new loan would be forgivable, if repaid by December 31, 2022.
- The application deadline: extended to December 31, 2020. - More details on this change, including the application process, are expected soon. September 24, 2020 - New enquiries line process: in order to provide a quicker response time, CEBA line callers will be asked to leave a call back number. An agent will return the call between Monday and Friday from 10:00 am to 9:00 pm EST. - A return call may take more than 7 business days. September 10, 2020 - Deadline for CEBA applications is extended from August 31 to October 31, 2020. June 26, 2020 - Expanded program application start June 26, 2020.
- Expanded program which was to commence June 19, 2020 was put on hold. - Updates to come June 18, 2020 - Expanded program to commence June 19, 2020. - Applications under the Non-Deferrable Expenses Stream (total employment income paid to employees in 2019 of $20,000 or less, and 2020 Eligible Non-Deferrable Expenses) follow a two-step process:
o Step 1: Apply at your financial institution o Step 2: You will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application. - If successful, the Government of Canada will notify your bank and provide funding for your CEBA loan. - Click here for more information: https://ceba-cuec.ca/# May 20, 2020 - Program will be expanded to sole proprietors receiving income directly from their businesses, businesses that rely on contractors and family-owned corporations that pay employees through dividends rather than payroll. How to I qualify? (payroll lower than $20,000): • have a business bank account • have a CRA business number, and to have filed a 2018 or 2019 tax return. • have eligible non-deferrable expenses between $40,000 and $1.5 million. April 16, 2020 - Will now be available to businesses with payroll between $20,000 and $1.5 million in 2019
April 2, 2020
How do I qualify? - Small business should have 2019 payroll of $50,000 to $1,000,000. How to apply? - Online via your bank. Applications to come out this week. |
Dec 8, 2020 - Deadline for submitting self identification form (PD27) is December 31, 2020 in order to avoid receiving a discrepancy notice at the end of the year.
July 30, 2020 - Self Identification Reporting now available via: • Represent a Client
This form is required to be completed if your business is eligible either for 10% subsidy only or for both 10% subsidy and CEWS. Filing this form will ensure that you do not receive a discrepancy notice from the CRA. April 2, 2020 What is it? - The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer. How do I qualify? - You are an eligible employer if you are a:
- To claim wage subsidy:
How to apply? - When: You can start reducing your source deduction remittances in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020.
- Separate subsidy per employer (associated employer rules don’t apply) Calculation worksheet: Click Here |
November 23, 2020 - CRA FAQs and CEWS application portal has been updated: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html October 27, 2020 - Further details released on how periods 8, 9 and 10 of the CEWS program will work (Details are pending Royal Assent and could change). Non-furloughed employees - While employers can still use 3 months revenue decline test (a “safe harbour” rule that would entitle an eligible employer to a top-up subsidy rate that is no less than it would have received under the three-month revenue-decline test), there is now an option to determine both base and top-up amounts by change in monthly revenues (year to year or Jan and Feb 2020 comparison). - Under new rule, base subsidy rate will be as follows:
And top-up subsidy rate will be as follows:
Example 1: 20% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 0.80 x 20% = $180.64 Example 2: 50% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 0.80 x 50% = $451.92.
October 13, 2020 - The CEWS program has now been extended until June 2021, with an increased subsidy rate of 65% until December 2020. The legislation for this change should be released soon.
September 24, 2020 - CEWS is extended to summer of 2021. Details to follow.
July 30, 2020 - All the proposed changes were passed. Extended program details can be found on here: Link or see below the chart. July 13, 2020 - Program to be extended to December 2020 https://www.ctvnews.ca/politics/feds-to-extend-wage-subsidy-program-until-december-1.5021990 - Applications for claim period 4 (June 7 to July 4) are open as of July 8, 2020. The eligibility criteria will be the same as period 1 to 3. - Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29). https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html June 22, 2020 - Proposed period 4 (June 2020) reduction is 30% - Period 5 & 6 are being reviewed
May 20, 2020
- The following legislative amendments have been proposed as well: • flexibility for employers of existing seasonal employees with regards to the baseline remuneration calculation; • to have CEWs apply to corporations formed on the amalgamation of two predecessor corporations
May 8, 2020 - Program to be extended past June 6 expiry date. April 21, 2020 - Applications to be released April 27, 2020. - CRA has launched a CEWS Calculator for Employers, this can be accessed at: Click Here April 16, 2020 - Applications will be due September 30, 2020. April 9, 2020 - The CEWS application will be reduced by the 10% subsidy dollar for dollar. April 13, 2020 - 75% wage subsidy to eligible employers for up to 12 weeks, to a maximum $847 per week per employee. - Which would be $10,164 (847 x 12 weeks) if maxed out. - Includes 100% refund for employer-paid contributions for Employment Insurance and Canada Pension Plan. How do I qualify?
- Calculating revenue: Its revenue from its business carried on in Canada earned from arm’s-length sources. - To calculate the revenue drop for the eligible periods:
- CERB:
- My Business Account (NOT OUT YET – MIGHT TAKE 3 - 6 WEEKS). Expectation is the 75% cheques start coming in July. Subsidy Calculation: - The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 would be the greater of: (1) 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and (2) the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee’s pre-crisis weekly remuneration, whichever is less. Subsidy for a non-arm's length individual is restricted to (2)
inclusively. - For more information see: Click Here |
November 23, 2020 - Even though the CERB has ended, the CRA is continuing to accept and process retroactive applications until December 2, 2020.
- Periods 5 to 7: You can apply through the CRA’s My Account or automated toll-free phone line at 1-800-959-2019 or 1-800-959-2041.
- Periods 1 to 4: You can apply by calling CRA at 1-800-232-1966.
August 4, 2020 - CERB is set to end September 26, 2020 June 18, 2020 - Maximum number of periods that can be claimed is 6 four-week periods i.e. 24 weeks - Return or repay CERB if you no longer meet the eligibility via: • CRA My Account • Online Banking • By Mail - Click here for more information: https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra/return-payment.html April 15, 2020 - Changes to the eligibility rules to:
- To apply for the Canada Emergency Response Benefit via CRA My Account you do not need a security code. April 2, 2020 What is it? - A benefit of $2,000 per four weeks, to a maximum of 16 weeks (4 months) How do I qualify?
How to Apply? - Via My Account with CRA/ phone call to CRA. - Applications already available Other: - Cannot get CERB and Employment Insurance (EI). - EI is based on 55% of insurable earnings – apply for CERB if 55% of insurable earnings does not give you over $2,000/ month |
Period | Default | Elects |
1 to 3 | January 1 to March 15, 2020 | March 1 to May 31, 2019 |
4 | January 1 to March 15, 2020 | March 1 to June 30, 2019 or
March 1 to May 31, 2019 |
5 to 9 | January 1 to March 15, 2020 | July 1 to December 31, 2019 |
Proposed changes for period starting in July to December:
Period 5 | Period 6 | Period 7 | Period 8 | Period 9 | |
Max. benefit per employee | $677.00 | $677.00 | $565.00 | $452.00 | $226.00 |
Revenue drop | |||||
50% and over | 60% | 60% | 50% | 40% | 20% |
0% to 49% | 1.2 x revenue drop | 1.2 x revenue drop | 1.0 x revenue drop | 0.8 x revenue drop | 0.4 x revenue drop |
Example 1: 20% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 1.20 x 20% = $270.96
Example 2: 50% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 60% = $677.00.
3 month average revenue drop | Top up CEWs rate |
70% and over | 25% |
65% | 18.75% |
60% | 12.50% |
55% | 6.25% |
Period 5 | Period 6 | Period 7 | Period 8 | Period 9 | |
Max. benefit per employee | $960.00 | $960.00 | $847.00 | $734.00 | $508.00 |
Revenue drop | |||||
50% and over | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) |
0% to 49% | 1.2 x revenue drop (Max. 60%) | 1.2 x revenue drop (Max. 60%) | 1.0 x revenue drop (Max. 50%) | 0.8 x revenue drop (Max. 40%) | 0.4 x revenue drop (Max. 20%) |
Before applying for CEBA 2.0 (extra 20,000) note the following changes:
CEBA – checking status of your application
As of December 14, 2020, a new status-checking website is available:
https://status-statut.ceba-cuec.ca/
CEBA forgivable portion of loan of $10,000 should be included in income in the year in which the loan is received. Or elect not to include the forgivable amount in its income by reducing its outlay or expenses. Amounts that are not forgiven can be deducted for the year in which the repayment is made.
CEBA – personal accounts
On October 26, 2020 the government announced that CEBA will be available to businesses that have been operating out of a non-business banking account.
To be eligible, businesses must:
- have been operating as a business as of March 1, 2020;
- successfully open a business account at a bank; and
- meet the other existing CEBA eligibility criteria.
The deadline to apply for CEBA is December 31, 2020.
Program will be expanded to:
• sole proprietors receiving income directly from their businesses
• businesses that rely on contractors
• family-owned corporations that pay employees through dividends rather than payroll
To qualify, these applicants with payroll lower than $20,000 would need:
• have a business bank account
• have a CRA business number, and to have filed a 2018 or 2019 tax return.
• have eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.
Will now be available to businesses with payroll between $20,000 and $1.5 million in 2019.
All the banks now have the application available online. Completing the application will take less than a minute. You might have to wait few minutes given the volume of applications.
You will need: Employer payroll account number and Box 14 on your T4 Summary.
How to Apply?
ONLY online at your bank's website. Calling your branch will not help. Applications for BMO start April 9th, other banks will be soon/ same.
Canadian Emergency Business Account
The CEBA will provide qualifying business customers with access to a $40,000 line of credit with:
Only customers who meet each of the following criteria are eligible for the program:
Per the requirements of the program as set out by the Government of Canada, customers will agree to use funds from this loan to pay for operating costs that cannot be deferred, such as payroll, rent, utilities, debt service, insurance and property tax.
Scotiabank will be issuing a bulk email to apply digitally next week as will the other Canadian banks.
Current details from some of the major banks can be found here:
Scotia: https://www.scotiabank.com/ca/en/personal/scotia-support/latest-updates/coronavirus-covid-19/business-banking.htm
CIBC: https://www.cibc.com/en/business/covid-19/emergency-business-account.html
RBC: https://www.rbc.com/covid-19/business.html
Corporate tax extension:
Payments date for current tax year (including instalments): extended to September 30, 2020.
No further filing deadline extensions
CRA will be waiving interest on existing tax debts related to:
• corporate income tax returns from April 1, 2020, to September 30, 2020
• and from April 1, 2020, to June 30, 2020 for HST returns.
May 26, 2020
Corporations Tax Return -Filing date for current tax year:
• Returns due June 2 – August 31 – filing deadline of September 1, 2020.
• Returns due March 18 and June 1– filing deadline of June 1, 2020 (unchanged).
April 27, 2020
Canada Emergency Commercial Rent Assistance (CECRA)
This program will lower rent by 75% for small businesses that have been affected by COVID-19.
It is expected that CECRA will be operational by mid-May, and further details will be announced soon.
More information can be found here: https://www.jarvisryan.com/communications/20
April 16, 2020
New developments:
https://www.cbc.ca/news/politics/trudeau-business-supports-premiers-1.5534124
April 8, 2020
EHT:
Corporate Tax Return – Filing and Payment Extension
Filing date for current tax year: extended to June 1, 2020 (corporations with a due date after March 18 and before June 1, 2020)
Payment date for current tax year: extended to September 1, 2020 (balances and installments due on or after March 18 and before September 1, 2020)
HST – Payment Extension
Payment remittance (including installments) requirement extended to June 30, 2020 for balances due after March 18 and before June 1, 2020.
WSIB - Filing and Payment Extension
Premium reporting and payment deferred to August 31, 2020.
Additionally, the WSIB will cease interest accrual on all outstanding premium payments. They will not charge penalties during this six-month deferral period.
Source: https://www.wsib.ca/en/financialrelief
Canada Emergency Business Account
Interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
Temporary Wage Subsidy:
“Businesses and non-profit organizations seeing a drop of at least 30 per cent in revenue due to COVID-19 will qualify for the government's 75 per cent wage subsidy program, Prime Minister Justin Trudeau announced today.
During the daily media briefing outside his residence at Rideau Cottage, Trudeau said the number of people a business employs will not determine its eligibility. Charities and companies big and small will qualify, he said.
For those companies experiencing a decrease in revenues of at least 30 per cent, the government will cover up to 75 per cent of a salary on the first $58,700, which could mean payments of up to $847 a week. The prime minister also encouraged businesses to top up their employee’s wages with the remaining 25 per cent of their salaries.
Trudeau said the wage subsidies will be retroactive to March 15, 2020.
More details of the program will be unveiled later today.”
Source: https://www.cbc.ca/news/politics/trudeau-covid19-business-supports-1.5514558
As the changes to the response to COVID-19 are constantly evolving we will continue to keep you posted with updates
Further details released on how periods 8, 9 and 10 of the CEWS program will work (Details are pending Royal Assent and could change).
Non-furloughed employees
While employers can still use 3 months revenue decline test (a “safe harbour” rule that would entitle an eligible employer to a top-up subsidy rate that is no less than it would have received under the three-month revenue-decline test), there is now an option to determine both base and top-up amounts by change in monthly revenues (year to year or Jan and Feb 2020 comparison).
Period 8 | Period 9 | Period 10 | |
Max. benefit per employee | $452.00 | $452.00 | $452.00 |
Revenue drop | |||
50% and over | 40% | 40% | 40% |
0% to 49% | 0.8 x revenue drop | 0.8 x revenue drop | 0.8 x revenue drop |
Period 8 | Period 9 | Period 10 | |
Max. benefit per employee | $734.00 | $734.00 | $734.00 |
Revenue drop | |||
50% and over | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%)
| 1.25 x (3 month revenue drop - 50%)
|
0% to 49% | 0.8 x revenue drop (Max 40%) | 0.8 x revenue drop (Max 40%) | 0.8 x revenue drop (Max 40%) |
Period | Default | Elects |
1 to 3 | January to March 15, 2020 | March 1 to May 31, 2019 |
4 | January to March 15, 2020 | March 1 to June 30, 2019 or March 1 to May 31, 2019 |
5 to 9 | January to March 15, 2020 | July 1 to December 31, 2019 |
Proposed changes for period starting in July to December:
Period 5 | Period 6 | Period 7 | Period 8 | Period 9 | |
Max. benefit per employee | $677.00 | $677.00 | $565.00 | $452.00 | $226.00 |
Revenue drop | |||||
50% and over | 60% | 60% | 50% | 40% | 20% |
0% to 49% | 1.2 x revenue drop | 1.2 x revenue drop | 1.0 x revenue drop | 0.8 x revenue drop | 0.4 x revenue drop |
Example 1: 20% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 1.20 x 20% = $270.96
Example 2: 50% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 60% = $677.00.
3 month average revenue drop | Top up CEWs rate |
70% and over | 25% |
65% | 18.75% |
60% | 12.50% |
55% | 6.25% |
Period 5 | Period 6 | Period 7 | Period 8 | Period 9 | |
Max. benefit per employee | $960.00 | $960.00 | $847.00 | $734.00 | $508.00 |
Revenue drop | |||||
50% and over | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) | 1.25 x (3 month revenue drop - 50%) (Max. 25%) |
0% to 49% | 1.2 x revenue drop (Max. 60%) | 1.2 x revenue drop (Max. 60%) | 1.0 x revenue drop (Max. 50%) | 0.8 x revenue drop (Max. 40%) | 0.4 x revenue drop (Max. 20%) |
Program to be extended to December 2020
Proposed period 4 (June 2020) reduction is 30%
Period 5 & 6 are being reviewed
https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html
Program to be extended past June 6 expiry date.
CBC Article: Click Here
Applications to be released April 27, 2020.
We (JRA) can make the application for you via Represent a Client.
CRA has launched a CEWS Calculator for Employers, this can be accessed at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html
Applications will be due September 30, 2020.
For cash flow purposes it might make sense for you to commence by taking the 10% Wage Subsidy.
The CEWS application is set to take 3-6 weeks to be rolled out and the CEWS subsidy will be reduced by the 10% subsidy dollar for dollar.
This would provide a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
Am I Eligible?
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
This subsidy would be available to eligible employers that see a drop of at least 15% of their revenue in March and 30% for the following months (see Eligible Periods).
How is the drop in revenue calculated?
An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method and would exclude revenues from extraordinary items and amounts on account of capital.
Employer can calculate revenues under the accrual or cash method, but not a combination of both.
Special rules for the computation of revenue are provided to take into account certain non-arm's length transactions, such as where an employer sells all of its output to a related company that in turn earns arm's length revenue. As well, affiliated groups are able to compute revenue on a consolidated basis.
Eligibility period:
Claiming period | Required reduction in revenue | Reference period for eligibility |
Period 1
March 15 – April 11 | 15% | March 2020 over:
|
Period 2
April 12 – May 9 | 30% | Eligible for Period 1
OR
April 2020 over:
|
Period 3 | 30% | Eligible for Period 1
OR
|
Hence the options available are:
1. calculate revenues under the accrual or cash method 2. And either compare: a. Monthly revenue year-over year or b. Each month with the average of January and February 2020
Once the method is selected you are required to use the same approach for the entire duration of the program. The application will likely be available in May hence you will be able to calculate which option works best for you.
How do I calculate the Subsidy?
The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 would be the greater of:
In effect, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees.
The pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.
A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of the lesser of:
What about the employer-paid contributions?
A new 100% refund for certain employer-paid contributions to Employment Insurance and the Canada Pension Plan has been introduced. This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.
For greater certainty, employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers apply for a refund, as described above, at the same time that they apply for the CEWS.
Which employees are eligible?
An eligible employee is an individual who is employed in Canada.
Employees who have been without remuneration for 14 or more consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, or from May 10 to June 6 are NOT eligible.
Where do I Apply?
Apply through the Canada Revenue Agency’s My Business Account portal.
Follow instruction on setting this up here: https://www.jarvisryan.com/help/categories/1/articles/12
Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.
What about the 10% Wage Subsidy?
For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
What about the Work-Sharing Program?
For employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing program reduce the benefit that their employer is entitled to receive under the CEWS.
How does the subsidy get treated?
The subsidy received is considered government assistance and is included in the employer’s income.
Source: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
To apply for the Canada Emergency Response Benefit via CRA My Account you do not need a security code.
In order to maintain your My Account (which expires without usage in 365 days):
Accessing the government programs corporately and personally requires a CRA My Account.
You can then access Service Canada’s My Service Canada Account and apply for any applicable social benefits
Once you have proceeded through the registration process, you will be mailed an access or activation code.
If you are also a business owner you will be able to add your business so that you may access it through the CRA My Business Account.
Deadline for submitting self identification form (PD27) is December 31, 2020 in order to avoid receiving a discrepancy notice at the end of the year.
For more information on submitting the form, visit: https://www.canada.ca/en/revenue-agency/services/subsidy/temporary-wage-subsidy/tws-reporting.html
Am I an eligible employer?
You are an eligible employer if you:
Additionally:
The company must have had a small business deduction limit greater than nil allocated in the prior year
CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million.
Separate subsidy per employer (associated employer rules don’t apply).
How much is the subsidy?
The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer. Please know payroll must continue and be paid in order to take advantage of this subsidy, if you stop payroll this is not available.
An annual salary of $55,000 per employee will result in getting the maximum benefit.
Owner Payroll:
If you do not get a regular pay cheque this will not work for you. Clients that do lump sum payments should consider going on regular payroll effective immediately until June 20, 2020.
In order for you to take advantage of this subsidy with your personal payroll – your gross payroll paid needs to be $13,750 over March 18, 2020, and June 20, 2020 in order to receive the maximum subsidy of $1,375.
How will I receive the subsidy?
The subsidy is claimed by reducing the tax portion of your monthly remittance. It cannot be applied against the CPP and EI.
When can I start reducing remittances?
You can start reducing your source deduction remittances in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020.
If you use a payroll service please advise them of your qualification.
How do I calculate the subsidy?
The subsidy is claimed by reducing the income tax portion of your remittance ONLY by the minimum of the 3 amounts:
NOTE: An eligible employee means the employee must be “employed” on the date of the eligible payment.
For example, if you have 5 employees earning monthly salaries of $4,100 (assumes all are under $55K annually) for a total monthly payroll of $20,500, the subsidy would be 10% of $20,500, or $2,050.
Worksheet to calculate subsidy: Click Here
For more information: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. While the first stages focused on public health and safety, in very short order, businesses and personal finances began to be affected. It is clear that these challenges will become worse before they get better. In an effort to combat these effects, the Government of Canada released a series of financial measures in mid-March.
This document summarizes selected government comments up to March 18, 2020.
Tax Return Due Date Deferral: The personal tax filing due date will be deferred until June 1, 2020. However, those expecting refunds or benefits (such as the GST/HST credit, Guaranteed Income Supplement and Canada Child Benefit) should file as early as possible. The government release encourages Canadians not to delay their filings in order to ensure their income-tested benefits are accurately computed.
Tax Payment Deferral: Taxpayers may defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18, 2020 (also including installments) and before September 2020. The government documents indicate that payment will be deferred “until after August 31, 2020”, which seems to imply payment will be due on September 1. No interest or penalties will accumulate on these amounts during this period.
Individuals Without Paid Sick Leave: 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 in imposed quarantine that claim Employment Insurance (EI) sickness benefits, effective March 15, 2020.
Waiving the requirement to provide a medical certificate to access EI sickness benefits.
Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks (comparable to EI sickness benefit). This benefit would 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 quality for EI sickness benefits; and
- parents with children who require care or supervision due to school closures, and are unable to earn employment
income, regardless of whether they qualify for EI or not.
Application for the Benefit will be available in April 2020, and require Canadians to attest (and continue to attest every two weeks) that they meet the eligibility requirements. Individuals can apply through CRA’s MyAccount, their My Service Canada Account, or by calling an automated toll-free number not yet released.
An Emergency Support Benefit will provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment. The individual amounts and process will be disclosed shortly.
Implementing changes to the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
A one-time special payment by early May 2020 through the Goods and Services Tax credit (GSTC) will be made. This will double the maximum annual GSTC payment amounts and result in an average boost to income for those benefiting by close to $400 for single individuals and close to $600 for couples.
The maximum annual Canada Child Benefit payment amounts would be increased by $300 per child for the 2019-20 benefit year. This will be added to the May, 2020 benefit cheque.
The Emergency Loan Program for Canadians Abroad will provide the option of an emergency loan to Canadians in need of immediate financial assistance to return home or to temporarily cover their life-sustaining needs while they work toward their return. Each application will be assessed according to their specific situation and needs. This emergency assistance is a repayable loan. Eligible Canadians currently outside Canada and needing help to return home can contact the nearest Government of Canada office (https://travel.gc.ca/assistance/embassies-consulates) or Global Affairs Canada’s 24/7 Emergency Watch and Response Centre in Ottawa at +1 613-996-8885 (collect calls are accepted where available) or email sos@international.gc.ca.
A six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans will be provided.
Tax Payment Extension: Businesses may defer, until after August 31, 2020, the payment of income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as installments. No interest or penalties will accumulate on these amounts during this period.
Other Payment and Filing Extensions: No comment was made about changing the filing and payments dates for payroll, GST/HST, and other non-income tax items.
CRA Audit Activity: 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.
Liaison Officer Service: The Liaison Officer service is now available over the phone and will be customizing information by ensuring small businesses are aware of any changes such as filing and payment deadlines, proactive relief measures, etc.
Payroll Subsidies: The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Businesses will benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
OTHER FILINGS AND ADMINISTRATION
Trust Filing Due Date Deferral: For trusts having a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1, 2020.
T3 Slips Submission Date: No specific statement was made regarding the deadline for filing T3 slips reporting income taxable to the trust beneficiaries.
Other Returns: Many taxpayers are required to file other tax and information returns. No mention was made of these, including partnership returns and NR4 reporting slips.
EFILE Signatures**: In order to reduce the necessity for taxpayers and tax preparers to meet in person, effective immediately the CRA will recognize electronic signatures** as having met the signature requirements of the Income Tax Act, as a temporary administrative measure. This provision applies to authorization forms T183 or T183CORP.
Individuals: 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. Banks have affirmed their commitment to working with customers to provide flexible solutions, on a case-by-case basis, for managing through hardships caused by recent developments. This may include situations such as pay disruption, childcare disruption, or illness.
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. The near-term credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.
The Office of the Superintendent of Financial Institutions (OSFI) announced it is lowering the Domestic Stability Buffer by 1.25% of risk-weighted assets, effective immediately. This action will allow Canada’s large banks to inject $300 billion of additional lending in to the economy.
For Exporters: The Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada (EDC) and is used by the government to support exporters when deemed to be in the national interest.
Interest Rates: The Bank of Canada cut the prime interest rate to 0.75%. Other banks have also reduced rates.
Indigenous Community: $305 million for a new distinctions-based Indigenous Community Support Fund will be provided to address immediate needs in First Nations, Inuit, and Métis Nation communities.
Homelessness: The Reaching Home initiative will be provided with $157.5 million to continue to support people experiencing homelessness during the COVID-19 outbreak. The funding could be used for a range of needs such as purchasing beds and physical barriers for social distancing and securing accommodation to reduce overcrowding in shelters.
Domestic Abuse Shelters: Women’s shelters and sexual assault centers will receive $50 million to help with their capacity to manage or prevent an outbreak in their facilities.
Many of the measures listed above have only been announced recently (March 18, 2020) and are noted as requiring Royal Assent. In recent public comments, it was indicated that the opposition parties have promised their support to move these measures quickly, therefore, we can presumably expect draft legislation in the short term.
Over the next days and weeks, the specifics on these programs will be released. Most of the details for these initiatives will be released on one of these four webpages:
General: https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/canadas-reponse.html
CRA: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html
Travel: https://travel.gc.ca/assistance/emergency-info/financial-assistance/covid-19-financial-help
Employment and Social Development Canada: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
As the situation develops further, there may be additional government measures, or modifications to those already announced.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
CRA now has the ability to withdraw a specified amount from your bank account on the date you specify (April 30th most likely).
To do this, you need to complete in Part G of the T183 form - pre-authorized debit agreement.
You can specify the account for which you prefer the pre-authorized debit to come from on the T183 or select an account the CRA may already have on file for your for direct deposit.
Please note that the CRA requires at least 5 business days to process the PAD. Therefore, if you choose to have your PAD taken from your bank account on April 30th, your return MUST be filed no later than April 24, 2019.
Starting with the 2016 taxation year, individuals who sell their principle residence will have to report the sale on their tax return. Reporting will be required for sales that occur on or after January 1, 2016 but there is likely no tax implications.
The 2020 cumulative lifetime capital gains exemption is $883,384.00
The Medical expense tax credit has been expanded to allow expenses related to service animals who are specially trained to perform specific tasks for a patient with a severe mental impairment that helps the patient cope with the impairment. Eligible expenses paid in 2018 include the cost of the animal, the care and maintenance of the animal (food and veterinary care), reasonable travel expenses paid for the patient to attend a school, institution, or other facility that trains in the handling of these animals, and reasonable board and lodging expenses paid for the patient's full-time attendance at a school, institution, or other facility that trains in the handling of such animals.
The Climate Action Incentive (CAI) payment can be claimed by eligible individuals who are residents of Saskatchewan, Manitoba, Ontario or New Brunswick. A new Schedule 14 will be included with the T1 package for these jurisdictions; simply complete the new schedule to claim the amounts you may be entitled to based on your family composition, and indicate the amount on line 449 of your income tax and benefit return. The CAI payment will first reduce any balance owing, and may create or increase your refund. A 10% CAI supplement is available to residents of small and rural communities who live outside a Census Metropolitan Area (CMA), as defined by Statistics Canada.
Our team of knowledgeable associates are happy to assist. Whether you have a question about navigating the Client Cloud, or about how to submit a certain document, you can contact our office for assistance.
Please give us our office a call at (905) 277-9499.