Tax Updates – March 2020

Earlier today, the government announced some details of relief for individuals and corporations as a result of the COVID-19 crisis. While full details aren’t yet known, below is a summary of some of the significant tax items. The full information released by the government can be viewed here.

Key Personal Measures

  1. The due date for personal tax returns is now June 1, 2020.
  2. Any income taxes that are currently owed or will be owing before September 30, 2020, can be deferred until after August 31, 2020; this includes instalment payments.
  3. The due date for trusts with a December 31, 2019 year-end is now May 1, 2020.
  4. A number of Employment Insurance (EI) items have been announced. Read more about this in detail on our blog about Employment Insurance here.
  5. The GST and Canada Child Benefit will be increased:
    a. Double the GST benefit for the 2019-2020 benefit yea and will occur by a one-time payment by early May.
    b. Increasing the maximum yearly amount for Canada Child Benefit for the 2019-2020 benefit year. This payment will be made as part of the May payment.
  6. The six large banks have confirmed support that may include up to a 6-month deferral on mortgage loans and other credit products. You need to speak with your bank directly to see what options are available to you directly.
  7. For those with Canada Student Loans that are being repaid, there will be a 6-month interest-free period.
  8. The required minimum withdrawal from RRIFs will be reduced by 25% for 2020 to account for the decrease in value.

Note for US Personal Taxpayers:

For any individual’s required to file US tax returns, the Internal Revenue Service has provided an automatic extension of time to file a 2019 tax return and to pay any taxes owing for 2019 until July 15, 2020.  This automatic extension will cover both 2019 taxes payable and 2020 estimated taxes payable that are due on April 15, 2020.  If you cannot file your tax return or related forms by the automatic extended due date, you will have to file an extension under the regular process to receive an extension of time to file your tax filings which will allow an extension until October 15, 2020, for individuals.  The extension to October 15 does not extend the time to pay any amounts owing, it only extends the time to file. If you have a State filing requirement, you will need to see if the individual State has provided similar relief.

Key Corporate Measures

  1. There was no announcement concerning filing deadlines for corporate tax returns and assume no change for now.
  2. Any income taxes that are currently owed or will be owing before September 30, 2020, can be deferred until after August 31, 2020. This includes instalment payments.
  3. For the next four weeks, no income tax audits or GST post-assessment reviews will start.
  4. Any interaction for audits currently in process will be temporarily suspended.
  5. Businesses that are eligible for the small business deduction (and non-profits and charities) can receive a subsidy up to 10% of the remuneration payable for the next three months. The maximum amount of subsidy is $1,375 per employee and $25,000 for each employer. This support can be accessed immediately by reducing the remittance of income tax withheld on the employees’ remuneration.
  6. The six large banks have confirmed support that may include up to a 6-month deferral on mortgage loans and other credit products. You need to speak with your bank directly to see what options are available to your company directly.

 

Feel free to get in touch with us for further information or if you need help with any of the above.