COVID-19 Tax Changes and Benefits for Canadian Taxpayers

Deadlines

The due date for filing individual tax returns has been extended by just over a month, from April 30, 2020 to June 1, 2020. The deadline for payment of tax has been extended to September 1, 2020. However, the CRA suggests filing early to ensure that you receive any benefits and credits you may be entitled to in a timely fashion.

If you are self-employed, your filing deadline remains unchanged – June 15, 2020. However, your payment deadline will be extended to September 1, 2020.

The deadline for non-residents filing a form NR4 has also been extended to May 1, 2020. The payment deadlines for NR4 related payments remains unchanged.

You may still receive Notices of Assessment with the payment date listed as April 30, 2020. This is a software error that can be disregarded.

Benefits and Support

Canada Emergency Response Benefit (CERB)

This benefit is temporary income support for people who are out of work (whether as an employee or proprietor) for reasons related to COVID-19. The maximum benefit is $2,000 every four weeks, for up to 16 weeks. You can apply at Canada.ca by clicking here.

This benefit applies who workers who reside in Canada and are at least 15 years old, if you:

  • Stopped working due to COVID-19; or
  • Are eligible for Employment Insurance for unemployment or illness purposes.

You must also have had:

  • At least $5,000 of income in 2019 for the past 12 months; and
  • Expect to be without employment or self-employment income for at least 14 consecutive days in the first four weeks.

The income that counts towards the $5,000 required to be eligible includes:

  • Employment income;
  • Self-employment income;
  • Maternity and parental benefits under Employment Insurance; and
  • Parental benefits under Quebec Parental Insurance Plan.

Please note that the $2,000 benefit applies for a four week period, and if your situation of unemployment continues past four weeks, you must reapply to continue receiving the benefit. You may currently re-apply for up to four periods (16 weeks total).

It is currently estimated that you should receive your benefit within 3 business days of application, if you sign up for direct deposit. If you do not have direct deposit set up,  you should receive your benefit within 10 business days.

Employment Insurance

Individuals who are quarantined due to COVID-19 can apply for Employment Insurance sickness benefits. The one-week waiting period will be waived for new claimants who are quarantined, and they will not have to provide a medical certificate. Additionally, if you are not able to apply immediately because you are quarantined, you can apply later and have your claim backdated.

For more information regarding Employment Insurance applications, please visit the EI website here.

GST/HST Credit Payments

There will be a one-time payment of your GST/HST amount on April 9, 2020, which should be double your maximum annual benefit. If you have filed a 2018 tax return and are normally eligible for the GST/HST Credit, you should receive this automatically.

If you have already received part of your GST/HST credit amount for the year, the remainder of your credit plus the new amount you are entitled to should be paid out in the one April payment.

You do not have to file your 2019 return to be entitled to this payment; however, your 2018 net income is the basis for this credit and it must be filed for you to be eligible.

To determine if you are entitled to a GST/HST Credit Payment, you can use the Child and Family Benefit Calculator – however the additional payments for COVID-19 support are not reflected in this calculator. You can double this amount to determine the total benefit you should receive.

Canada Child Benefit Payments (CCB)

The maximum CCB payment for the year has been increased by $300 per child. This amount will be included in your May monthly payment.

Registered Retirement Income Funds (RRIF)

Due to the volatility in the stock market and the impact that may have on retirement savings, the government has decreased the minimum RRIF withdrawal by 25% for the year.

This change will apply to those receiving payments from a defined contribution registered pension plan (RPP), as well as a pooled registered pension plan (PRPP).

Individuals who have already withdrawn more than the updated minimum amount will not be permitted to re-contribute to their RRIPs in order to meet the reduced minimum.

Benefits reviews

If your benefits are currently under review by the CRA and you are required to send in supporting documentation, you can wait to submit the documents. Benefits reviews are currently on hold and you will receive a new letter when the CRA resumes these operations.

Free Tax Clinics

Tax clinics are run each year by the Community Volunteer Income Tax Program to help individuals with modest income prepare their tax returns. Many clinics have been postponed due to the measures put in place for social distancing. For example, Toronto Public Libraries have cancelled all events, including the Tax Preparation Assistance programs, through to the end of April.

There may still be some clinics being run on a “drop-off and pick-up” or appointment basis. Unfortunately, the CVITP program is not set up to handle tax returns digitally. Once social distancing measures have been scaled back, there will be an attempt to re-schedule the tax clinics that are currently postponed.

To determine if you are eligible for free tax assistance, please visit the CRA website here. To see if there are any clinics which are still running in your area, please check here.

Drop Boxes and Walk-in Services

All CRA drop boxes have been closed, except for those located at the Jonquiere, Sudbury, and Winnipeg tax offices. The CRA is unable to ensure that your documents will be properly received and filed if they are left at any other drop boxes during this time.

There will be no walk-in services offered at the counters of any of the tax centres or CRA offices during this time.

The CRA is encouraging taxpayers to file their tax returns online using Netfile or a tax professional. Alternatively, you may mail your documents to the appropriate tax centre.

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