Business Owners and Taxpayers Response for COVID-19

We’ve been following the COVID-19 pandemic news closely in how it is affecting Canadians. We tried to sum up some up most of the information in this post that is useful for business owners and tax payers but please know that it could change day-by-day.

Canadian Government Economic Response Plan

On March 18, 2020 the Canadian government announced how it plans on dealing with COVID-19. Some important things to highlight for businesses are in there on how the government plans to:

  • Ensure Businesses Have Access to Credit
  • Help Businesses Keep their Workers
  • Flexibility for Businesses Filing Taxes

For Businesses

Wage Subsidies
Small business employers will be able to receive a temporary wage subsidy for a period of three months to help in this time of distress.

  • What we know right now
  • This wage subsidy program will equal 75% of wages for the first $58,700 paid, up to a maximum of $847 per week. The Prime Minister recommended that businesses cover the other 25%.
  • In order for your business to be eligible, your organization must have had a decrease in revenues of 30%. No further details have been given on how they will measure this.
  • The subsidy will be applied retroactively to March 15, 2020.
  • Anyone caught abusing the subsidy will be dealt with harshly.
  • More details to follow on the application process

Who’s an Eligible Employer?

  • Self-employed individuals and partnerships
  • Canadian-controlled private corporation (most small businesses’ in Canada)
  • Registered charities and non-profit organizations.

For Employees and Self-Employed Individuals

For employees who are laid off or can’t work during this period, there are some programs available for you.

Employment Insurance (EI)

In order to access an Employment Insurance program, you must log-in through your CRA MY Account or My Service Canada Account.

EI Sickness Benefit

If you are sick or quarantined, EI sickness benefits can provide up to 15 weeks of income replacement and will be available to eligible people. Visit the EI sickness benefits page to apply.

If you are quarantined and can’t apply because of your quarantine, you can apply at a later date.

The Canadian Emergency Response Benefit (CERB)

To help support workers and allow businesses to keep their employees, the government has proposed the CERB.

This piece of legislation would provide workers who lost their job due to the COVID-19 pandemic with a taxable benefit of $2,000 a month for up to 4 months.

The CERB covers:

  • Canadian workers who have lost their job
  • Workers who are sick, quarantined, or taking care of someone with COVID-19
  • Workers who are still employed but are not being paid due to the disruption of COVID-19.
  • Working parents who must stay at home with their children that are sick or need to be looked after because of school and daycare closures.

To qualify for CERB, it applies to wage earners, contract workers and self-employed individuals who would not be eligible for EI. All Canadians who have stopped working because of COVID-19 would be able to receive the CERB, whether they are EI eligible or not.

How to apply for CERB

Applying online should be available on April 6, 2020 and in order to qualify you must have had $5,000 in employment income, self-employment income, maternity, or parental benefits for 2019 or in the 12-month period preceding the day when the application is complete.

If you already applied for EI because of COVID, your claim will automatically be moved to CERB and you will receive the 16 week CERB benefit first. If needed, your EI will kick in after the CERB has run out. If you were already receiving EI, once your EI runs out you can then apply for CERB.

Tax Deadlines

Personal Tax Deadline

Instead of personal income taxes due April 30th, the government has extended the deadline to June 1, 2020 and must be paid by September 1, 2020.

GST/HST Filing Deadline

The Minister of National Revenue will extend all HST deadlines to June 30, 2020

-Monthly filers who collect for the February, March, and April 2020 reporting period. These amounts are now due June 30, 2020.

-Quarterly Filers who remit from January 1, 2020 through to March 31, 2020 are now due June 30, 2020.

-Annual filers who HST returns and installments are due in March, April, or May 2020 are now do by June 30, 2020.

Businesses Tax Deadline

Any business that has a year-end due after March 18 and before June 1, 2020 will now have a filing date of June 1, 2020. The payment of your business taxes are now due September 1, 2020

More details will be given as the days go by so stay tuned for further updates.

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