Corporate Income Tax, Personal Income Tax, Small Business

Employer and Employee Updates!

Canada Emergency Wage Subsidy

The specific details on the 75% Canada Emergency Wage Subsidy (CEWS) were released today by Finance Minister Morneau.

Retroactive to March 15, 2020 and up to June 6, 2020, if a business’s gross revenue has decreased by at least 30% compared to the same month in the prior year, the business will be eligible for the CEWS.  This applies to all businesses, non-profits and charities, regardless of size and whether incorporated or not. The number of employees does not matter.

Owners will have to confirm that they still qualify each month.

For each employee at a company that meets the 30% test, their income will be covered up to 75% on the first $58,700 of “pre-crisis remuneration” that would be earned annually, up to a maximum benefit of $847 per week.  For those interested that’s $847 per week X 52 weeks per year / 75% = $58,700.

Owners expected to make their best efforts to top up wages to 100%.

Applications will open “soon” through the My Business Account portal on the CRA website.  Business owners should all ensure that they have access to their CRA My Account and My Business Account and that direct deposits are set up.  Funds will be paid out in 3 – 6 weeks.  All businesses should complete their direct deposit details with the CRA my Business account to ensure the funds are received faster.

Employers that receive the subsidy but are not eligible will be required to repay amounts received.  Penalties may apply in cases of fraudulent claims and cases where employees have not been paid.

Businesses that do not qualify for the CEWS may continue to qualify for the previously announced 10% reduction to payroll remittances.

Full details can be found here.

Canada Emergency Business Account 

On Friday the Prime Minister announced a new Canada Emergency Business Account (CEBA). The CEBA will be administered through the banks and is intended for small and medium businesses. The CEBA will provide a loan of up to $40,000, interest-free.  Further, if $30,000 is fully repaid on or before December 31, 2022, then the remaining $10,000 will be forgiven.

This is available to businesses that had a gross annual payroll of between $50,000 and $1,000,000 on their 2019 T4 Summary (Update April 20, 2020, this has been broadened to be between $20,000 and $1,500,000)

Canada Emergency Response Benefit 

Applications for the $2,000 per month CERB will open on April 6 and eligible Canadians can apply online at Canada.ca.  Recipients will have to confirm once a month to continue receiving the benefit.  There is a schedule for applications based on the month of your birth.

If your employer is receiving either of the wage subsidies, you cannot collect the CERB.  Ensure that your CRA My Account access is setup and sign up for direct deposit to receive the funds directly to your bank account in just a few days.  Without direct deposit, a cheque will be mailed and funds will be received in about 10 days.

At a basic level, if you are over 15, earned $5,000 or more in 2019 or in the past 12 months and have no current income because of disruptions from COVID-19, then you will likely be eligible for the CERB.

It’s important to stress that no tax will be withheld from this benefit and recipients will report this on their 2020 tax returns and pay tax on this in April 2021.

The full criteria and a list of questions and answers are available here.

Recap and Resources!

There has been a ton of new developments over the past couple weeks.  We’ve sent out a number of notices that can get lost in the shuffle, so below we’ve created a list of key items:

Sign up for My Account and My Business Account with the CRA (I’ve been told that using your BC Personal Health Number is the easiest way to confirm your identity)

  • Personal tax filing deadline – June 1 (self-employed deadline currently still June 15)
  • Corporate tax filing deadline for December 31 year ends is still June 30
  • Personal and corporate tax payment deadline – August 31 (including instalment payments) No interest will accrue on amounts that would normally have become owing between March 18 and August 31, 2020.
  • GST payment deadline – June 30
  • Canada Child Benefit maximum will increase by $300 (click here to apply if you don’t currently receive)
  • GST Credit for individuals will increase for May by $400 for individuals and – $600 for couples
  • Mortgage support and flexibility from lenders (if anyone has benefited from this please let us know)
  • Canada Emergency Response Benefit (CERB) $2,000 per month details here
  • EI Benefits (click here to apply, possibly more than the $2,000 per month but a massive backlog due to number of applications)
  • Reduction in minimum withdrawals for RRIFs by 25%
  • Student loan repayment deferrals for 6 months, interest-free.  No need to apply.
  • Kids Help Phone received $7.5 million to help young people through this time.  They can be reached here 
  • Work-share program for those with reduced hours through EI has been extended from 38 weeks to 76 weeks (click here to apply)
  • Canada Emergency Wage Subsidy (CEWS) 75% of gross wage subsidy details here
  • Canada Emergency Business Account (CEBA) $40,000 interest-free loan (contact your bank)
  • Loans and Co-Lending Programs for small and medium businesses through BDC and EDC (details here, they suggest contacting your bank for this as well)
  • Bank of Canada interest rate reduction will lower rates on variable mortgages
  • BC Landlords may receive a $500 per month rental supplement, applications opening soon, details here
  • Child care for essential services workers can be found here
  • Child care centres should no longer be charging fees and must reserve spaces for children to return
  • BC Emergency Benefit for Workers, $1,000 one time payment for those that receive the CERB, applications open soon
  • Worksafe BC guidelines for employees and employers can be found here
  • Worksafe postponed deadlines for Q1 reporting and payment until June 30, details here
  • BC Tax Filing and Payment Deferrals until September 30, 2020:
  • BC Art Council Grants of up to $15,000 details here
  • BC Hydro customers can defer payments and access grants, details here and here
  • Business Owners can apply for BC Hydro waiver of charges for up to 3 months, details here
  • ICBC customers can defer monthly payments for up to 90 days, details here

Did we miss anything?  Let us know!

Best regards,

Andrew de Verteuil, CPA, CGA
de Verteuil & Company Inc.

One thought on “Employer and Employee Updates!

  1. Pingback: 75% CEWS Legislation Details | de Verteuil & Company Inc. CPA

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