Update on 2020 income tax filings and COVID-19 relief programs

With a little less than three weeks left until the personal tax filing deadline, this is a good time to update our clients and colleagues on the status of tax filing and payment deadlines for the 2020 tax year.

Unlike last year, the Canada Revenue Agency (CRA) has not announced any tax filing extensions, and only very limited payment extensions.

T1 personal income tax and benefit returns

Personal income tax returns for the 2020 taxation year, and the payment of taxes in respect of 2020, will be due on April 30, 2021. Individuals with self-employment earnings have until June 15, 2021 to file their personal income tax returns, though the payment deadline remains April 30, 2021.

T2 corporation income tax returns

Corporation income tax returns remain due six months following the fiscal year end. For example, a corporation with a December 31, 2020 fiscal year end must file its corporation income tax return by June 30, 2021. The payment due date is ordinarily two months following the fiscal year end, and three months following the fiscal year end in certain cases.

Other filing and payment due dates

The filing and payment due dates are unchanged for other types of tax and information returns including Goods and Services Tax/Harmonized Sales Tax returns, and T106, T1134, and T1135 information returns.

Budget dates

The Government of Canada announced a federal budget will be released on April 19, 2021. The Government of British Columbia also announced a budget date of April 20, 2021.

Covid-19 Program Updates

Interest relief

The Canada Revenue Agency (CRA) has announced interest relief for taxpayers who received Covid-19 benefits and have a balance due on their 2020 personal income tax returns.

To qualify, a taxpayer must have taxable income for 2020 of no more than $75,000, have received at least one Covid-19 benefit (such as CERB) during 2020, and must file a 2020 personal income tax return.

Qualifying taxpayers will not be charged interest on the balance due on their 2020 personal income tax return until April 30, 2022. Interest relief is not available for balances due from other taxation years.

The CRA also announced that late filing penalties will still apply to all taxpayer’s 2020 personal income tax returns, which are due on or before April 30, 2021 (June 15, 2021 for taxpayers, and their spouses, who report income from self-employment on their 2020 personal income tax return).

Canada Emergency Wage Subsidy (“CEWS”)

On March 3, 2021, the Government of Canada announced the maximum wage subsidy rate would remain at 75% for the periods from March 14, 2021 to June 5, 2021.

The last day applications can be made for claim period 8 is April 22, 2021. Period 9 applications must be made on or before May 20, 2021. Period 10 applications must be made on or before June 17, 2021. Period 11 applications must be made on or before July 15, 2021. Finally, period 12 applications must be made on or before August 12, 2021. Applications for period 13, which is the period from February 14, 2021 to March 13, 2021, were accepted starting on March 14, 2021. Period 14, covering the period from March 14, 2021 to April 10, 2021, will open on April 11, 2021.

Canada Emergency Rent Subsidy (“CERS”)

Also on March 3, 2021, the Government of Canada announced the maximum rent subsidy rate for the period from March 14, 2021 to June 5, 2021 would remain at 65%.

Canada Emergency Business Account (“CEBA”)

On March 22, 2021, the Government of Canada extended the deadline for CEBA applications from March 31, 2021 to June 30, 2021.

Small and Medium Sized Business Recovery Grant

The Government of British Columbia’s Small and Medium Sized Business Recovery Grant program provides grants of between $10,000 and $30,000 to small and medium business affected by Covid-19. Additional grants of between $5,000 and $15,000 are available to eligible tourism-related businesses.

On March 4, 2021, the Government of British Columbia made the program’s qualifying criteria less stringent. After the change, an applicant only needs to show a 30% revenue decline from March 2020 to present compared to the same one-month period in 2019. The program was also extended from March 31, 2021 to the earlier of (i) August 31, 2021 and (ii) expenditure of the available funds.

This program has detailed application criteria and requires applicants to develop and submit a formal, written recovery plan. Additional details are available here.

BRITISH COLUMBIA INCREASED EMPLOYMENT INCENTIVE

Applications may be submitted for this Province of British Columbia program beginning on March 31, 2021. The application deadline is December 31, 2021. More details are available here.

BRITISH COLUMBIA CIRCUIT BREAKER BUSINESS RELIEF GRANT

This grant provides between $1,000 and $10,000 to certain businesses affected by the March 30, 2021 orders of B.C. Provincial Health Officer. The grant is available to businesses of any size that have been in operation since February 1, 2021 and applications are expected to open during the week of April 12, 2021. Grants are available until June 4, 2021 or earlier if available funds are fully expended.

Qualifying businesses are those in the hospitality and fitness sectors. The grant may be used to cover the cost of rent and wages, and such items as the loss of perishable goods. More information is available here.

BRITISH COLUMBIA LAUNCH ONLINE GRANT PROGRAM

This program provides up to $7,500 to qualifying B.C. businesses to create an online store or to improve their e-commerce presence to attract new customers or to expand their market. Applications are open until September 30, 2021 or until the available $30 million is fully expended. More information is available here.

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