CRA has recently announced the following support for employers as the ongoing COVID-19 pandemic continues to impact the normal operations of businesses and their ability to re-hire workers and prevent further job losses.
Canada Emergency Wage Subsidy (CEWS)
As a Canadian employer who has seen a drop in revenue due to COVID-19, you may be eligible for a subsidy to cover part of your employee wages, retroactive to March 15. An online calculator/spreadsheet is available to help you determine how much you can qualify for.
Learn more here, Canada Emergency Wage Subsidy (CEWS).
Remember that CEWS is taxable. You must include the amount of CEWS you receive on your annual tax return when calculating taxable income. You will also be expected to report the amount of the CEWS that was used to pay each of your employees’ salaries by using a special code in the “other information” area at the bottom of the employees’ T4 slips.
Read more about the New T4 reporting requirements on our blog post here, New T4 reporting requirements.
10% Temporary wage subsidy for employers
A 10% temporary wage subsidy for employers (TWS) is available for eligible employers for a period of 3 months. This only applies to the federal, provincial, or territorial income tax portion of the remittances made to the CRA.
Eligibility
To be an eligible employer, you must meet the following conditions:
You have a Canada Revenue Agency (CRA) payroll program (RP) account as of March 18, 2020
You paid eligible remuneration to an eligible employee from March 18 to June 19, 2020
You are one of the following:
individual or sole proprietor (excludes trusts)
partnership
non-profit organization
registered charity
Canadian-controlled private corporation (CCPC) (including a cooperative corporation)
Payroll remittances made to Revenu Québec are not eligible for the TWS.
If your business was closed due to COVID-19 and you did not pay salary, wages, bonuses, or other remuneration to an eligible employee from March 18 to June 19, 2020, you cannot take advantage of the subsidy, even if you are an eligible employer.
If you're unclear about your eligibility as an employer, contact us and we'd be happy to provide you with some pointers to help with the assessment.
Subsidy
The subsidy is equal to 10% of the payroll remittances you paid from March 18 to June 19, 2020, up to $1,375 for each eligible employee. The maximum total is $25,000 for each eligible employer.
Learn more here, 10% Temporary Wage Subsidy for Employers.
Deferral of GST/HST Remittances
The CRA has previously allowed all businesses to defer, until June 30, 2020, any GST/HST payments or remittances that become owing on or after March 27, 2020, and before July 2020. This means that no interest will apply if your payments or remittances are made by June 30, 2020.
Businesses that continue to experience difficulty in remitting GST/HST and customs duty amounts owing can contact the CRA and Canada Border Services Agency (CBSA) to make a request for the cancellation of penalties and interest, and/or for a flexible payment arrangement with the CRA.
Learn more here, FAQs for deferral of GST/HST Tax Remittances.
Schedule a meeting
At Arria CPA, we have been closely following the CRA's developments during the pandemic, and are happy to share our knowledge with you. Contact us for a free, no-obligation consultation to learn more about how we can help you report the tax impacts of COVID-19 on your business.
Disclaimer: Please note that this is only a brief summary and is based on current accounting regulations and tax law interpretations. Accounting regulations and tax laws are subject to continual review and change, so should the facts provided to us be inaccurate or incomplete, or should the law or its interpretation change, our summary may be inappropriate for your uses. This article is written for educational purposes only, and as such, we recommend you consult a professional before making an accounting or tax decision. If you have any concerns, or would like further consultation regarding this matter, please contact us.
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