The federal government has announced financial aid totaling $82 billion for the COVID-19 pandemic. $55 billion of this total is in the form of tax deferrals that are available to all taxpayers. Here’s what you can expect as new filing and payment deadlines apply.
The government has introduced several tax measures to provide relief to Canadians, including:
- An extension of filing deadlines for individuals and trusts
- An extension of payment deadlines for most taxpayers up to September 1, 2020 (for amounts due on or after March 18 and before September 1, 2020)
- Allowing electronic signatures on forms, including the T183 and T183CORP
- Reducing the minimum withdrawals from RRIFs by 25% for 2020
On March 18, the federal government announced significant economic measures to support the economy during the COVID-19 pandemic. A total of $82 billion in financial aid, equal to three percent of Canada’s gross domestic product, was announced, including
- $27 billion in direct payments to Canadians who will require support, and
- $55 billion in tax deferrals available to all taxpayers.
The package announced today, together with the economic aid announced last week, provide economic stimulus totaling $93 billion. The tax measures announced as part of that stimulus package are outlined in this tax alert.
Extensions of tax filing and payment deadlines
The federal government announced extensions for tax filing deadlines and payment deadlines, as follows:
*The payment deadline applies to all income tax payments due on or after March 18, 2020, and before September 1, including balances and installments due. No interest or penalties will apply up to this date. No extensions for GST/HST filings or payments have been provided for yet.
**Individuals who personally report business income, as well as their spouses, have an extended filing deadline of June 15. Given the extension of the filing deadline for individuals up to June 1, it appears that the filing deadline for individuals with a June 15 filing deadline currently remains unchanged.
***A corporation normally has a tax return filing deadline that is six months after its taxation year-end. Furthermore, depending on the type of corporation and other criteria, the due date for payment of its balance owing for the taxation year would be either two months after its year-end or three months after its year-end. For example, a corporation with a December 31, 2019 year-end would have a regular filing deadline of June 30, 2020. This filing deadline currently remains unchanged. That same corporation would have to pay its balance owing for the 2019 taxation year by either February 29 or March 31, 2020. If this corporation is a small business or, more specifically, a Canadian-controlled private corporation (CCPC) that meets certain criteria, it would qualify for the later balance due day of March 31. As this day is after the announcement date of this stimulus package, the CCPC would have an extended payment deadline for its balance due of September 1, 2020.
No extension announced… yet
No announcements have been made to extend the filing deadline for partnership returns (T5013) or any other information returns, as well as other tax filings. The filing deadlines that have not yet changed include:
*Note: in an effort to streamline the information presented here, explanations have been simplified. For details on your specific scenario please contact your Grant Thornton advisor.
Furthermore, no extensions have been provided for payments related to GST/HST, source withholdings or any other payments not specifically related to income tax.
Other important filing deadlines for individuals and corporations can be found on the Canada Revenue Agency’s (CRA) website.
Other tax-related measures
Due to the current pandemic, many Canadians are under quarantine or self-isolation. Apart from the significant hardships this has caused, particularly for the elderly, this has also resulted in a practical tax-related problem of obtaining the required signature to authorize a representative to file a taxpayer’s return. To deal with this problem, the federal government announced that it would accept electronic signatures, effective immediately, for all requirements under the Income Tax Act. Specifically named in the press release were forms T183 and T183CORP, which provide authorization for a representative of a taxpayer to e-file that taxpayer’s return on their behalf.
Canadians who have retired and are withdrawing amounts from their Registered Retirement Income Funds (RRIF) are required to withdraw a minimum amount each year, based on various factors. Due to the negative economic impact of the COVID-19 pandemic, many Canadians withdrawing amounts from their RRIF are faced with significantly decreased values in their investments, which will negatively impact their ability to make those minimum withdrawals. In recognition of this, the minimum withdrawals from an RRIF have been reduced by 25% for 2020.
The government also announced leniency with respect to audits of taxpayers, as follows:
- Canada Revenue Agency (CRA) will not commence any audits (GST/HST or income tax) within the next four weeks on small and medium-sized enterprises.
- Any audits that are currently underway will be temporarily suspended for the “vast majority of businesses”, as stated in the news release. No clear indication was provided on which businesses would not qualify for this suspension or how long this suspension would last.
The CRA offers free on-site visits by a CRA liaison officer for owners of a small business or self-employed individuals to help them understand their tax obligations. Due to the outbreak, liaison officers will not be making in-person visits; however, they will still be available over the phone to provide the same assistance. For organizations that provide assistance to taxpayers belonging to certain groups, the CRA also provides in-person visits through their Outreach Program, as a way to provide help for these taxpayers. Again, due to the outbreak, the CRA has taken steps to continue this program by making its outreach officers available over the phone. These newly revamped remote programs could be invaluable to individuals and businesses as they navigate the uncertain times ahead.
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