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Wage Subsidy Update

March 27, 2020 1:59 pm Leave a Comment

On March 27, 2020 the federal government announced additional economic measures to support small businesses and entrepreneurs. These measures include

an increase in wage subsidies to 75% for qualifying businesses for up to 3 months retroactive to March 15, 2020 so that employers can keep workers on the payroll;
allowing businesses, including self-employed individuals, to defer all GST/HST payments until June; and
launching the new Canada Emergency Business Account. The program will provide interest-free loans to small businesses.

In addition, the government has confirmed that the new $2000-a-month Canada Emergency Response Benefit will be taxable.

More details will be released in the following days.

For a link to the announcement click here.

Federal government announces broad tax deadline extensions

11:15 am Leave a Comment

The federal government announced additional extensions to many for tax-related deadlines. Most federal tax filing deadlines have been extended to June 1, 2020, including the March 31 deadline for T1134 forms and T2s. The filing deadline for the T5013 partnership return and other information that individuals will need to complete their T1 returns has been extended to May 1, 2020.

Note that some returns and payments will still be due at the usual time.

Click here to read more about the tax deadline extensions.

Employer Health Tax Changes

March 26, 2020 2:40 pm Leave a Comment

On March 25, 2020, the Ontario government announced relief measures to help support Ontario businesses when they need it most. These include increasing the Employer Health Tax exemption for 2020 from $490,000 to $1 million and a five‑month relief period for Ontario businesses who are unable to file or remit their provincial taxes on time due to the special circumstances caused by the coronavirus (COVID‑19) in Ontario.

To read more about Employer Health Tax click here.

COVID-19 Economic Response Plan – Legislative Update – March 25, 2020

11:25 am Leave a Comment

In the early morning hours of March 25, 2020, Bill C-13 “An Act respecting certain measures in response to COVID-19“ was introduced, and received Royal Assent by the afternoon.

To support workers and help businesses keep their employees, the government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The CERB would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

The Notice of Ways and Means Motion provided good news that proprietorships and partnerships that have employees can also obtain relief from the Temporary Wage Subsidy Program.

The announcements have been forthcoming on a regular basis, so you may want to see a summary of all the available support for individuals and support for businesses all on one page – Canada’s COVID-19 Economic Response Plan. For further details and application processes we direct you to the following link.

We recognize that these are challenging and unprecedented times. We value our clients and hope that you stay safe and healthy.

Associated links

Important changes to tax-filing and payment deadlines

March 24, 2020 2:05 pm Leave a Comment

The CRA understands that individuals and businesses might be dealing with difficulties in filing their income and benefit returns, and in cash-flow problems in the coming months.

Click here to see important changes and information, some of which affect tax-filing and payment deadlines, and the ways you can interact with the CRA.

Temporary Wage Subsidy for Employers

1:57 pm Leave a Comment

On March 20, 2020, CRA released further details regarding the Temporary Wage Subsidy for Employers.

The Temporary Wage Subsidy for Employers is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency (CRA).

Please click here to read more about the Temporary Wage Subsidy for Employers.

A worksheet is available for download here.

COVID-19: Government’s comments March 18, 2020

March 23, 2020 11:58 am Leave a Comment

Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. While the first stages focused on public health and safety, in very short order, businesses and personal finances began to be affected. Click here for a summary of the government’s comments up to March 18, 2020.

COVID-19 Update: March 17, 2020

11:56 am Leave a Comment

With coronavirus (COVID-19) top of mind, we feel it prudent to communicate with you our action plan to help minimize the spread of this virus within our community. Out of an abundance of caution, to promote a healthy work environment and do our part to limit the spread of COVID-19, we have already taken and are in the process of adopting the following precautionary actions:

We are restricting face-to-face client meetings and are strongly encouraging phone meetings in lieu.
We are encouraging our team members to practice “social distancing” inside and outside our office and avoid large group gatherings.
We have increased the frequency and depth of cleaning of the high-touch areas in our offices.
Hand sanitizers have been made available to all staff and accessible in multiple points throughout our reception and shared areas.

Closing the office to visitors

As we believe action needs to be taken proactively, we are restricting access to our office to only Ritchie Shortt & Tully LLP team members until further notice. We are requesting that any documents that you are required to send to us are to be sent to us by one of the following methods:

Electronically using our secure portal system,
Via direct courier mail, or
Physically drop off your information using our private drop mail box located on the back side of our office (accessed via parking lot).

This plan of action is designed to cause as little disruption as possible to our clients, while keeping our clients, employees and their families safe. To date, we have not received direction from Canada Revenue Agency regarding any extensions to the current April 30^th tax deadline. We will continue to monitor this situation closely and release updates as appropriate. If you have any questions about these policies or their potential impact, please do not hesitate to contact us!

Child Care Deductions: What can I claim?

March 9, 2020 11:08 am Leave a Comment

If you are a parent who has to pay for child care while you go to work or school, the payments you make for child care (subject to some restrictions listed below) can be a deduction from your gross income.

You can claim the following childcare expenses incurred in the tax year:

Caregivers such as nannies and babysitters (you must provide their Social Insurance Number as well as all related receipts).
Day nursery schools and daycare centres.
Educational institutions that provide childcare services.
Day camps and day sports schools with a primary goal of childcare.
Boarding schools, overnight sports schools, or camps where lodging is involved.

There are annual deduction limits that vary with each child’s age and, if your child has a disability, a higher limit may be available. You can claim up to 2/3rds of your earned income, up to the following maximum amounts for the 2019 tax-year:

$8,000 per child under 7
$5,000 per child between 7 to 16
$11,000 for disabled, dependent children who qualify for the disability tax credit
$5,000 for a disabled child over 16 who does not qualify for the disability tax credit but is still dependent on you

For a boarding school or overnight camp that provides childcare, you may only claim the following amounts (up to):

$200 per week for a child under 7
$125 per week for a child between 7 and 16
$275 per week for an eligible disabled child

The child care expenses most often must be claimed by the person with the lower net income; unless any of the situations listed in Part C or Part D of form T778 applies.

The above is not an exhaustive list of deductible child care expenses. For more information, see Income Tax Folio S1-F3-C1, Child Care Expense Deduction.

We can assist you with all your family tax deduction questions and give you personalized tax advice. Be sure to contact Ritchie Shortt & Tully LLP if you have any questions or would like our assistance.

RRSP Contribution Limit

February 24, 2020 4:12 pm Leave a Comment

An RRSP is a registered retirement savings plan with the government to which you or your spouse can contribute. The income earned from the funds contributed to your plan accumulates tax-free in your RRSP. You are able to contribute an amount to your RRSP account (up to your contribution limit) up to December 31st of the year in which you turn 71 years of age. Deductible RRSP contributions can be used to reduce your tax liability for the year. The deadline for contributing to an RRSP for the 2019 tax year is March 2, 2020. Some common questions you may be asking yourself have been answered below.

What is my RRSP contribution limit?

Your RRSP contribution limit for 2019 can be found using one of the following methods:

Check your 2018 Notice of Assessment from CRA
Check online on CRA’s “My Account” service
Perform the following calculation:

A) Your unused RRSP deduction room carried forward from 2018

Plus

B) The lesser of the following two amounts:

18% x 2018 earned income
The annual RRSP limit (for 2019, the annual limit is $ 26,500)

Less

2018 Pension Adjustment (reported on 2018 T4 slip) or a prescribed amount

Plus

C) Your pension adjustment reversal

Less

D) Your net past service pension adjustments

What happens if I overcontribute?

It is imperative that you check your RRSP contribution limit before you make any contributions to your plan. CRA tracks RRSP overcontributions and charges penalties on overcontributions exceeding $2,000. If you belong to a pension plan, then it is important to note that the pension adjustment reversals and net past service pension adjustments will affect your RRSP contribution room.

What happens if I don’t contribute to my RRSP?

If you decide to not contribute any amounts to your RRSP account, your RRSP contribution limit is carried forward indefinitely.

We can assist you with all your RRSP questions and give you personalized tax advice. Be sure to contact Ritchie Shortt & Tully LLP if you have any questions or would like our assistance!