The Government of Canada has announced additional details on some of the fiscal measures being taken as part of the COVID-19 economic relief package:
CRA filing deadlines
Further extensions to some tax-related deadlines were announced on March 26th. The current deadlines are:
- *NEW* The filing deadline for trust returns (T3), partnership returns (T5013), and statement of amounts paid or credited to non-residents (NR4) has been extended to May 1st, 2020.
- Personal tax returns are due on June 1st, 2020. The regular filing deadline for self-employed tax filers, June 15th, 2020, remains unchanged. Related personal tax liabilities will now be due on September 1st, 2020.
- Corporate tax filing deadlines are unchanged but again, any tax instalments or final tax payments due on March 18th, 2020, or thereafter, can be deferred and are now due September 1st, 2020.
- The March 31st deadline for T1134 forms and T2s has been extended to June 1st, 2020.
- There is currently no formalized relief for GST/HST instalments or GST/HST balances due. However, an announcement today suggests a possible deferral.
Canada Emergency Response Benefit (CERB) becomes law
On March 25th, the COVID-19 aid package received royal assent following modifications to the previously announced Emergency Care Benefit (ECB) and Emergency Support Benefit (ESB) measures for individuals whose income has been affected by the COVID-19 pandemic. The newly announced Canada Emergency Response Benefit (CERB) replaced both the ECB and ESB measures.
CERB represents a taxable benefit of $2,000 per month for up to four months for workers earning no income as a result of being laid off due to COVID-19, being sick with COVID-19, taking care of a family member sick with COVID-19, or required to stay home without pay to care for children as a result of school and daycare closures. The CERB net benefit will be $1,800 per month after a $200 (10%) withholding tax. CERB will be paid every four weeks and is available from March 15th, 2020 until October 3rd, 2020.
Any Canadian who has ceased working due to COVID-19, regardless of whether or not they are eligible for Employment Insurance (EI), can receive CERB—including wage earners, contractors and self-employed individuals. However, workers who contributed to EI and earned 2019 employment income in excess of $53,099 may receive more through the EI program ($573 per week) than CERB ($2,000 a month). Those already regularly receiving EI will continue to receive their benefits and should not apply for the CERB. If an individual’s EI benefits end before October 3rd, 2020, but they are unable to return to work due to COVID-19, they can then apply for CERB.
The Canada Revenue Agency is responsible for administering CERB and will be introducing an online portal to accommodate applications in early April. Eligible individuals should receive their first CERB payment within 10 days of application.
Employer Health Tax exemption increasing in Ontario
The Employer Health Tax (EHT) is a tax paid by employers based on their total annual Ontario payroll. Private-sector employers with a total annual Ontario payroll of less than $5 million are currently eligible for an EHT exemption on up to $490,000 of their payroll. Registered charities are also eligible for this exemption.
In order to provide immediate financial relief to employers, the government is proposing to retroactively raise the EHT exemption from $490,000 to $1 million for 2020. The exemption would return to its current level of $490,000 on January 1st, 2021.
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