written on behalf of Feigenbaum Law
The arrival of COVID-19 has upended the lives of all Canadians, interrupting not only employment and health care but also other institutions that allow Canada to function on a day-to-day basis. The Canada Revenue Agency is no exception to this. We’d like to take a moment to share what changes have already been announced in regard to this year’s tax season in response to the challenges currently being faced by all Canadians as a result of the health pandemic.
Changes for Filing Tax and Paying Amounts Owing
On March 18, the CRA announced it was deferring the income tax filing deadline for individuals. The new date by which taxes must be filed is June 1, 2020. For trusts that have a taxation year ending on December 31, 2019, the return filing due date has been deferred until May 1, 2020.
If an individual is responsible for payment to the CRA after completing their income tax return, the date on which these payments must be made has been extended until August 31, 2020. No interest or penalties will accumulate on these amounts before that date.
Regardless of the deadline, the CRA has stated that it encourages individuals who expect to receive a tax refund or benefits under the GSTC or the Canada Child Benefit to not delay filing in order to ensure their entitlements are properly determined.
The CRA’s Outreach Program which helps people understand their tax obligations and the benefits and credits available to them has also been made available over the phone and through webinars where possible.
Flexibility for Businesses
In addition to providing flexibility for individuals, the CRA is also allowing all businesses to defer the payment of any income tax amounts that become owing on or after March 18 and before September 2020 until after August 31, 2020. The agency has also said it will not contact any small or medium businesses to initiate any post-assessment GSH/HST or income tax audits for the next four weeks.
Additional Measures for Support Workers and Parents
The CRA has also offered new support for people whose employment has been impacted by COVID-19. Employment Insurance sickness benefits will no longer have a one-week waiting period, and people will not have to provide a medical certificate to access those benefits.
An Emergency Care Benefit fund has been established to provide up to $900 bi-weekly for up to 15 weeks for working people (including self-employed) who are quarantined or sick (or taking care of a family member who is, or are unable to work because their kids are home) but do not qualify for EI sickness benefits. Access to these funds will begin in April.
U.S. Filing Deadline Extended As Well
The U.S. Treasury Department and the Internal Revenue Service issued a notice on March 20, 2020, extending the federal income tax filing deadline from April 15th to July 15th. This replaces an original notice which extended the payment deadline only. The extension is automatically applied to anyone required to file federal income tax in the U.S. and does not require a special request for an extension.
At Feigenbaum Law we offer personal, confidential service to individuals and corporations with all manner of tax and legal issues in Canada and cross-border with the United States. We regularly assist high net-worth individuals with tax returns and complex tax planning and have a wealth of experience navigating the complexities of the U.S. and Canadian tax systems. Please call us at 1-877-275-4792 or reach us online to see how we can help you today.