Tax season can be stressful at the best of times. Getting your receipts in order is probably the last thing on your mind right now, as you worry about keeping yourself and your loved-ones safe during this pandemic. To provide some relief to Canadians who may be stressed and experiencing financial hardships during this time period, the federal government has announced some new temporary changes for this 2020 tax season. “This may help some Canadians, who are concerned about their cash flow in the coming months,” says Georgia Swan, Tax and Estate Planner for TD Wealth. More changes may be announced in the coming days and weeks, but here is what we know so far:
The new deadline for individual filers is June 1, 2020
The annual deadline is usually the end of April but has been extended by one month. “This gives Canadians more time to collect the tax information that they need,” says Swan. “Also, Canadians may have challenges working with their accountant or tax preparer who may be working remotely.” Any money owed to the Canada Revenue Agency can be deferred until September 1st, 2020, with no penalties or interest payable.
Businesses may defer payments until September 1, 2020
Although corporate filing deadlines haven’t changed, the Canada Revenue Agency will allow all businesses to defer any payments on amounts which would normally have been owing starting March 18th until September 1st 2020. That would include balances due, as well as installments. No interest or penalties will accumulate on these amounts during this period. “Also, to ease business owners’ minds, the CRA has committed to not initiating any tax audits for the next month,” says Swan.
The new filing deadline for trusts is May 1, 2020
For trusts that have a taxation year ending on December 31, 2019, the return filing due date will be deferred until May 1st, 2020. Any balance owing can be deferred until September 1st, 2020, and any interest and penalties will be waived.
Also the Canada Revenue Agency has been mindful that tax preparers and accountants may not be able to meet with their clients. To make things easier, the CRA will accept electronic signatures. CRA services that are normally available only in person, such as the CRA Outreach Program, will be available by phone, and by webinar where possible.
But even with these changes, there are some good reasons you may not want to delay in filing. “While convenient for Canadians, if you don’t need to delay your tax filing, it may be helpful to get your return done within the usual filing deadlines,” says Swan. “Some benefits, such as the Canada Child Benefit is calculated using your return and getting those benefits may be delayed until after you file.” In other words, the quicker you file, the faster you may receive funds if they are owed to you. For further information and updated details on these tax measures, visit the Canadian Department of Finance and the Canada Revenue Agency.
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