02 Apr Financial Supports from The Government During COVID-19 Pandemic
Financial Supports from The Government During COVID-19 Pandemic
Since the COVID-19 outbreak in Canada, the federal government has been developing programs that provide financial supports to Canadians struggling with cash-flow challenges in the upcoming months. For instance, the Canadian government is postponing the due date of tax filing and payment for both individuals and businesses through Canada’s COVID-19 Economic Response Plan.
In this time of lockdown or quarantine, if you are meeting financial issues related to tax, for example, tax payment and/or tax return filing, here are the key facts that you are looking for.
- Tax-filing and Payment Deadline Changes
- ● Individuals:
- ● Self-employed individuals and their spouse or common-law partner:
- ● Business:
- ● Trusts:
- ● Charities:
- Financial Supports for Individuals
- ● Individuals and families:
- ● People facing unemployment:
- ● Seniors:
- ● Students and recent students:
- Financial Supports for Business
- ● Avoiding layoff:
- ● Access to credit:
- ● Support for Farmers:
- ● Supporting financial stability:
- ● More flexibility:
Tax-filing and Payment Deadline Changes
The changes in the tax-filing deadline are parts of the COVID-19 Economic Response Plan from CRA to help people deal with financial problems in the upcoming time. Thus, please note carefully the section below that summarizes changes to the deadline, that specifically apply to your situation:
The due date to file a 2019 personal income tax return has been deferred from April 30th, 2020 to June 1st, 2020. On the other hand, for payment due for 2019 income and other tax benefits return, the extension granted is deferred from April 30th, 2020 to September 1st, 2020.
● Self-employed individuals and their spouse or common-law partner:
For anyone self-employed or whose spouse or common-law partner is self-employed, the deadline to file your 2019 taxes is still June 15th, 2020 however all taxes owed must be paid by September 1st, 2020.
We understand that if the tax return would ordinarily be due between March 18th and June 1st, 2020 it is now due June 1st, 2020. Otherwise, the normal six-month filing deadline applies. CRA has also extended the deadline for paying income tax amount that is owing or due between March 18th and September 1st, 2020 to September 1st, 2020. The business will not meet penalties and interests if they pay all their owned tax by September 1st, 2020.
The deadline for filing tax form for trusts with a taxation year-end of December 31st, 2019 is extended to May 1st, 2020 instead of March 31st, 2020; with payment due date as of September 1st, 2020. However, CRA will carefully consider other circumstances on a case-to-case basis.
The Charities Directorate is extending the filing deadline to December 31, 2020, for all charities with a Form T3010, Registered Charity Information Return due between March 18, 2020, and December 31, 2020.
Financial Supports for Individuals
Individuals Support program in Canada’s COVID-19 Economic Response Plan has seven categories. Look carefully at these categories below to see if you qualify to receive financial support from the government:
● Individuals and families:
- Canada Child Benefit (CCB) is now providing an extra $300, which means an average family can get approximately $550 more in this program. You can get this benefit in the scheduled CCB payment in May. Those who already receive this benefit do not need to re-apply.
- Special Goods and Service Tax credit payments for low- and modest-income families now have additional benefits close to $400 for individuals and $600 for couples. You do not need to re-apply if you are currently eligible.
- Individuals now have extra time to file income tax returns. The due date for filing your tax return is now June 1st, 2020 with payments due by September 1st, 2020.
- Mortgage support is available. Canadian banks have committed to work with their customers on a case-by-case basis to find solutions to help them manage hardships caused by COVID-19.
● People facing unemployment:
The new Canada Emergency Response Benefit (CERB) will provide a taxable benefit of $2000 a month for up to 4 months period to those who are eligible in one of those categories:
- Workers who must stop working due to the Coronavirus outbreak without paid leave or financial support.
- Workers who are sick, quarantined or taking care of people who are positive to COVID-19
- Working parents who must stay homes without pay to take care of their children that are sick or need additional care because of school and daycare closures.
- People who are still employed but are not being paid because there isn’t sufficient work.
- Employed people who have been asked not to come to work by their employer.
- Wage-earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
- You can apply for this support on this site.
- If you are sick, quarantined or have been directed to self-isolate, CRA will waive the requirement. This action is to provide a medical certificate to access EI sickness benefits. Apply on this site.
CRA is reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
● Students and recent students:
Effective March 30, we are placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. Thus, you do not need to pay these loans and interests during this time. Students do not need to apply for the repayment pause.
One of the fastest ways to gain benefits and financial supports from the CRA is to sign up for PersonalBanker’s tax-reclaim service. We will fix your documents’ errors so you can get more deductions and benefits while reclaiming your taxes in 10 years period.
Financial Supports for Business
● Avoiding layoff:
- CRA is extending the maximum duration of the Work-Sharing program from 38 weeks to 76 weeks. Indeed, CRA offers this program to workers who agree to reduce their normal working hours. Apply for the Work-Sharing program here.
- Qualifying businesses will receive 75% wage subsidies for up to 3 months. CRA will publish the eligibility criteria for these wage subsidies before the end of March.
● Access to credit:
- Business Credit Availability program will provide more than $10 billion of additional support. This program targets small and medium businesses through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
- Export Development Canada is supporting businesses by offering their bank a guarantee on loans of up to $5 million. The reason is to ensure that companies can access more cash immediately.
- The new Canada Emergency Business Account is a new loan program. They will implement this program rapidly by eligible financial institutions in cooperation with Export Development Canada (EDC). Small businesses and not-for-profits can get interest-free loans of up to $40,000 to cover their operating costs.
- A New Loan Guarantee for Small and Medium-Sized Enterprises
- A New Co-Lending Program for Small and Medium-Sized Enterprises
● Support for Farmers:
Increasing credit availability will keep farmers and food processors financially strong during this difficult time.
● Supporting financial stability:
- Insured Mortgage Purchase Program, click here for specific details.
- The Bank of Canada has responded by lowering interest rates, intervening to support key financial markets and providing liquidity support for financial institutions.
- Lowering the Domestic Stability Buffer
● More flexibility:
- More time to pay income tax
- Deferral of Sales Tax Remittance and Customs Duty Payments
The Canadian government has been working effectively on the COVID-19 response plan. However, the programs have not yet completed and require further updates. We will update all the newest information from CRA.