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How COVID-19 government updates affect you and your taxes

Since the onset of COVID-19, the federal government has introduced measures to support Canadians during these challenging times. It’s been a lot to take in, so as the crisis continues to evolve, we will be providing regular updates to help you navigate these changes. Continue to check this page for regular updates.

New Tax Filing Deadlines

The federal filing deadline for income tax returns has officially been extended to June 1, 2020. In addition, if you have a balance owing, it does not have to be paid until September 1, 2020.
Penalties and interest will not be charged if payments are made by the extended deadline. This includes the late-filing penalty as long as the return is filed by September 1, 2020.

However, even with this extension, if you are receiving the Canada Child Benefit and/or GST/HST Credit, you should not delay filing any longer than is necessary. This will ensure your entitlement for the 2020-21 benefit year (which begins in July 2020) is properly determined.

In addition, if you are required to make instalment payments, you can put off paying any amounts that come due after March 18, 2020 until September 1, 2020.

For businesses, the federal government has deferred the payment of any income tax amounts owing after March 18, 2020 and before September 1, 2020 without interest or penalties.

The government will also be deferring GST, HST, and customs duties until June 30, 2020.

Top-ups for CCB and GST/HST Credit Recipients

As a special bonus to help you get through these difficult times, the government will increase the maximum annual Canada Child Benefit (CCB) payment amounts for the 2019-20 benefit year by $300 per child. This top-up amount will be included with your May payment.

Also, if you are receiving the GST/HST Credit, you would also have received an extra payment in April averaging $400 if you are single or $600 if you are a couple.

Quebec Deadline

The Quebec government has also announced an extension of the filing deadline for TP1 tax returns to June 1 – the same as the federal extension. Just as is the case with the federal government, any amounts you may owe to the Quebec government won’t need to be paid until September 1st.

In addition, for those who pay income tax instalments, payment of the June 15, 2020 instalment is also suspended until September 1, 2020.

For Quebec businesses, the payment of instalment payments and tax amounts owing is suspended until September 1, 2020.

Measures for Businesses

To support businesses that are facing revenue losses, and to help prevent lay offs, the government announced several new measures:

  • To support businesses that are facing revenue losses and to help prevent lay offs, the government has implemented the Canada Emergency Wage Subsidy for qualifying businesses. The subsidy will be equal to 75% of remuneration paid from March 15 to August 29, 2020 and will be capped based on a maximum annual wage of $58,700, up to a maximum of $847 a week per employee. This subsidy will be backdated to March 15, 2020.
  • Employers will get a 100-per-cent refund of their contributions to Employment Insurance, the Canada and Quebec Pension Plans and the Quebec Parental Insurance Plan for periods where the employee was being paid while off work.
  • Quebec’s small businesses may also be eligible for provincial aid. Thanks to the Temporary Concerted Action Program for Businesses, eligible businesses, including non-profit organizations, can benefit from financial support that makes up for the lack of liquidity. Financing in the form of a loan guarantee is of a minimum of $ 50,000.
  • The Canada Emergency Business Account, is a new $25 billion program that will offer small businesses interest-free loans of up to $40,000. It is intended to help cover their operating costs during a period when their revenues have been temporarily reduced due to the COVID-19 crisis. Businesses that repay $30,000 of the loan on or before December 31, 2022 will be forgiven the remaining $10,000.
  • The Canada Emergency Commercial Rent Assistance (CECRA) program is a new rent relief program to help businesses that can’t afford to pay rent at a time when their operations are shut down because of the COVID-19 pandemic. The federal government has reached an agreement with all provinces and territories to lower rent by 75% for small businesses that have been affected by COVID-19 for April, May, and June. The government will cover 50% of that reduction, with the property owner covering the rest. Small businesses that have been strongly affected by COVID-19 and paying less than $50,000 per month on rent will be eligible to receive this support.
  • Canadian Emergency Response Benefit

    The Canadian Emergency Response Benefit (CERB) is a payment of $2,000 every four weeks, for a total of up to 16 weeks. A maximum of $8,000, will be paid to workers who lost their income as a result of COVID-19. Eligible workers include Canadians who have lost their job, are sick or quarantined, or are taking care of someone who is sick with COVID-19. In addition, working parents who must stay home without pay to care for children who are at home due to sickness or school and day care closures are also covered. Seasonal workers and Canadians who have recently exhausted their Employment Insurance (EI) benefits will also be eligible. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for EI. Originally you would have had to have lost all your income in order to qualify for CERB. However, this was subsequently changed so that workers with income up to $1,000 per month would also qualify.

    Like Employment Insurance benefits, taxes won’t be deducted at the source, meaning you’ll get the full $2,000 payment. However, this means that taxes will be owing when you file your taxes in 2021 for the 2020 tax year. How much you owe will depend on your tax bracket and how much tax was withheld from your other income.

    Reduction of RRIF Minimum Withdrawals

    The minimum amount that seniors must withdraw from Registered Retirement Income Funds (RRIFs) in 2020 will be reduced by 25%. This provides flexibility to seniors whose RRIFs have dropped in value, so that they will not have to liquidate their plans in order to meet minimum withdrawal requirements. Similar rules will apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.

    Additional Measures

    The government has put several other measures into place, including:

  • A six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repayment. The same also applies for Quebec’s provincial student financial assistance program.
  • The CESB will provide support to students and new graduates who are unable to find full-time employment or are unable to work due to COVID-19 and are not eligible for EI or the CERB. Eligible students can receive $1,250 a month, or $2,000 a month for those with dependants or disabilities. This benefit will be available beginning in May and will run to August of this year. For a list of all student relief measures, please click here .
  • Temporarily waiving the one-week waiting period for collecting EI sickness benefits for claimants who are in imposed quarantine.
  • Homeowners with CMHC-insured loans who are facing financial difficulties will be allowed to defer mortgage payments.
  • The CRA has implemented a temporary measure, which will allow an electronic filer to submit an electronic return for their client, even if a paper return has already been submitted for that tax year but has not yet been processed.
  • Manitoba will provide a one-time $200 refundable tax credit to seniors called the Seniors Economic Recovery Credit. All seniors age 65 or over in 2020 who live in Manitoba will receive the credit regardless of income. Seniors who filed a 2018 tax return as a resident of Manitoba will automatically receive a cheque in May 2020. All other eligible seniors can claim the credit when they file their 2020 tax return next year.
  • Eligible Canadian seniors will receive a special one-time, tax-free payment of $300 for the Old Age Security (OAS) pension, plus an additional $200 for seniors eligible for Guaranteed Income Supplement (GIS) for a total one-time payment of $500. The payments will be applied automatically.
  • For seniors whose 2019 income information have not been assessed, GIS and Allowance payments will be temporarily extended to ensure that there is no interruption in payments until October. To avoid an interruption in benefits, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020.

  • If you have any questions about the impact of these changes on you and your taxes, H&R Block Tax Experts are here to help. Visit here for the latest information on how we’re making ourselves available to our clients during the COVID-19 crisis and how we can best serve you.

    Click here to see a handy infographic outlining the changes that may affect you.