CEBA UPDATE AND TAX PAYMENT DEADLINE EXTENSIONS

There have been a number of changes made by the federal government and CRA which may impact you and your business:

CEBA

The CEBA website has been quietly updated to now expand on the definition of eligible non-deferrable expense categories, which is relevant for businesses with total employment income paid to employees in 2019 of $20,000 or less, and 2020 Eligible Non-Deferrable Expenses (subject to certain adjustments) greater than $40,000 and less than $1,500,000.

The applicant’s total incurred and projected Eligible Non-Deferrable Expenses, are measured as they stood on March 1, 2020. Under all expense categories, the amounts to be included in the total are those actually paid in January and February 2020, as well as those for which a legal or contractual obligation existed on March 1, 2020, for the applicant to pay the expense within the remainder of 2020 and which cannot be avoided or deferred beyond 2020 even during a period of shut down and depressed revenues as a result of COVID. Please refer to https://ceba-cuec.ca/ and navigate to the section called “Forecasted 2020 Eligible Non-Deferrable Expenses” for more details.

The full list of Eligible Non-Deferrable Expense categories are the following:

Wages and other employment expenses to independent (arm’s length) third parties;
Rent or lease payments for real estate used for business purposes;
Rent or lease payments for capital equipment used for business purposes;
Payments incurred for insurance related costs;
Payments incurred for property taxes;
Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
Payments for regularly scheduled debt service;
Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower;
Payments incurred for materials consumed to produce a product ordinarily offered for sale by the Borrower.

HGA Recommends:

If you didn’t qualify for CEBA before, because your business did not incur $40,000 in non-deferrable expenses in a year, you may now qualify. You can apply for CEBA through your primary financial institution.

Extended CRA payment deadlines

The CRA extended the payment due date from September 1, 2020 to September 30, 2020 for the following:

2019 individual tax returns
2019 or 2020 corporations
Trust returns
Instalment payments

There has been no change made to filing due dates. However, the CRA will not charge late-filing penalties for returns filed by September 30, 2020. The CRA will also waive arrears interest on existing tax debts related to individual, corporation, and trust income tax returns from April 1, 2020, to September 30, 2020, and from April 1, 2020, to June 30, 2020, for Goods and Services Tax/Harmonized Sales Tax (GST/HST) returns. This measure for existing tax debts does not cancel penalties and interest already assessed.

HGA Recommends:

CEBA UPDATE AND TAX PAYMENT DEADLINE EXTENSIONS

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