It has been hard to keep up with all the announcements both from the Federal Government and the Manitoba Government to help out those who have been affected financially since mid-March when the COVID-19 pandemic started.
First, let’s review the tax deadlines.
CRA deadlines: June 1, June 15, June 30, September 1
June 1: the extended tax filing deadline (from April 30)
June 15: deadline for the self-employed (no changes)
June 30: deadline for businesses to pay amounts owing (like GST collected and normally due by June 15)
September 1: deadline to pay amounts owing for 2019 personal income taxes without additional interest.
Canada Revenue Agency “softened” the June 1 deadline. Here is what their website says:
“You will not be charged late-filing penalties or interest if your 2019 individual (T1) income tax returns are filed and payments are made prior to September 1, 2020. However, we are preserving the June 1 filing deadline for T1 individuals, and the June 15 filing deadline for T1 self-employed individuals (sole-proprietors), in order to encourage filing returns in time to accurately calculate benefits, which rely on 2019 tax returns for entitlement calculation.
If the 2019 tax return is not assessed in time, benefits and/or credits for the July to September 2020 payments will be based on information from 2018 tax returns. Once the 2019 return is filed, it is possible that the CRA will make adjustments based on the updated income information.”
You can still file your taxes after June 1 and not be penalized or pay interest but only if you pay in full by September 1. If you do not pay in full, CRA will add penalty and interest to your amount owing.
If you are self-employed and routinely do not pay in full when you file, you must file by June 15 to avoid the penalty.
If you receive GST credits, Canada Child Benefits, or Guaranteed Income Supplement, you are encouraged to file as soon as possible so these benefit payments are calculated accurately starting in July 2020. If you do not file now, the benefits will continue up to September, but CRA will use your 2018 income until they have your new 2019 tax info to calculate the benefits.
Bottom line: file your 2019 personal income taxes as soon as you can.
New Benefits Available
Here is a summary of the benefits available to different groups and how they will be paid.
Seniors
Both the federal and provincial government have announced payments to be made to seniors, regardless of their income.
The Manitoba Seniors Economic Recovery Credit provides a $200 one-time, refundable tax credit to Manitoba seniors (65+). The cheques will be mailed late May 2020. It will not be direct deposit (they do not have your banking information). They are using your address on your 2018 income tax return. If you do not receive the cheque, you can claim the credit on your 2020 tax return next Spring (at this point we do not know exactly how it will work).
The federal government announced additional benefits for seniors. Every senior (65+) who is receiving OAS (Old Age Security) will receive $300. This will be added to your OAS payment for June 2020. And seniors with lower incomes receiving the GIS (Guaranteed Income Supplement) will get an additional $200 for a total of $500 added to their income payment at the end of June. If both spouse are receiving GIS, they will each receive $500. These payments will not be reported on tax slips and you will not need to report these amounts on your 2020 tax return.
Canada Child Benefit
All taxpayers receiving the Canada Child Benefit received an extra $300 per child added to their monthly benefit in May. This income is not taxable and is not reported as income on the tax return.
GST Credit
During the month of April all taxpayers eligible for GST credits in the previous 12 months (either the annual payment July 2019 or the quarterly payments last July and October 2019 and January and April 2020) received a special one-time only GST credit. It was paid on April 9. The government even made GST payments to some taxpayers who did not receive the GST credit in the past year. It appears they “bumped up” the base amount so more taxpayers would qualify, so those with family incomes up to about $60,000 also received an unexpected GST credit.
Employees
The CERB (Canada Emergency Response Benefit) that pays $2,000 for a four week period has been fairly easy to apply for and to renew. I’m hearing that the phone option was much better than trying to apply on line. And some individuals that were receiving EI did get switched over to the CERB.
You can receive CERB for up to 16 weeks between March 15 and October 3 2020. And you can earn up to $1,000 of employment or self-employment income in the four week period.
Best to find the details on the CRA website; too detailed to explain here.
Remember it is taxable income, so depending on your other income, you may end up paying 26 to 46% tax on the benefit you receive. And if you receive back pay from your employer for the same period, you will end up paying back some of the CERB (you cannot receive double the income for the same period). The government isn’t working on how it will do that yet, but they will ask employers for records of when employees worked. So employers, make sure you keep good records in 2020 for when we are asked about our employees.
If you are an employee that received double income, put some money aside so you can pay it back when you are asked. CRA will likely take back some refunds next spring if there is money owing.
Students
The Canada Emergency Student Benefit is similar to CERB, but targeted to students who cannot find employment because of the pandemic. This benefit is available to those attending post-secondary school and those who graduated from secondary school in 2020 and are enrolled in post-secondary education for September 2020. The payment is $1250/month or $1750/month if you have dependants or you are disabled.
The Disabled
The Manitoba Disability Economic Support Program provides a one-time $200 benefit to lower-income Manitobans with disabilities receiving Employment and Income Assistance benefits. The payment will be made by cheque in June. No need to apply.
CEWS, CEBA, CECRA
Lots of programs for businesses and employers. The eligibility rules are quite detailed on CRA’s site, so I recommend if you haven’t already checked them out, to do so there.
Many businesses that have no employees (just the owner and maybe subcontractors) may not be eligible for much; most of the programs are intended for employers that have employees. Those businesses without employees may only have CERB to help them out.
There have been so many program announcements since March it’s been difficult to keep up with them. If you are not sure if you qualify, I recommend checking out the CRA website. CRA has made it fairly easy to determine if you as an individual or you as a business qualify for a benefit.
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact Ste Anne Tax Service at 204.422.6631 or 36 Dawson Road in Ste Anne (near Clearview Co-op) or info@sataxes.ca