What measures has the government has put in place to target small business for COVID-19?
The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
Are there any extension provided to filing deadlines during the Coronavirus pandemic?
Businesses and individuals may also defer, until after August 31, 2020, the payment of any income tax amounts that become owing, and installments, without interest and penalties.
Is there any relief from CRA audits during the COVID-19 pandemic?
The CRA will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
What is the Coronavirus Temporary Wage Subsidy for Employers?
Ottawa’s proposed Temporary Wage Subsidy for Employers was announced last week and is set to be in place for three months. It will be equal to 10% of total remuneration paid between March 18, 2020, and June 20, 2020, up to a maximum of $1,375 per worker and $25,000 per employer.
Which types of businesses will qualify for the Coronavirus Temporary Wage Subsidy for Employers?
Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
How will the COVID-19 Temporary Wage Subsidy for Employers be administered?
The subsidy will be available immediately, but rather than receiving a cheque from the government, the employer may reduce the amount it is required to remit in payroll deductions to the CRA. In other words, pay less source deductions and keep the difference.
How do you calculate the COVID-19 Temporary Wage Subsidy for Employers?
Businesses must manually calculate the subsidy, based on the CRA’s guidelines.
For example, if you have 5 employees earning monthly salaries of $4,100 for a total monthly payroll of $20,500, the subsidy would be 10% of $20,500, or $2,050.
If you calculated a subsidy of $2,050, you would reduce your current remittance of federal, provincial, or territorial income tax by $2,050. You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020.
Will the COVID-19 Temporary Wage Subsidy for Employers affect deductions from my employees?
No. You will continue deducting income tax, Canada Pension Plan contributions, and Employment Insurance premiums from salary, wages, bonuses, or other remuneration paid to your employees, as you currently do. The subsidy is only calculated when you remit these amounts to the CRA.
Is the COVID-19 Temporary Wage Subsidy for Employers considered taxable income?
Yes. If you receive the subsidy, you have to report the total amount as income in the year in which the subsidy is received.
