Last updated: Oct. 8, 2021
Good news from Ottawa: the government will provide interest relief for people who accessed COVID-19 programs last year. Anything to make your life a little less taxing right now is a win.
We’ve summarized the news below and other recent COVID-19-related updates that could help you and your business. For up-to-date information on government programs, along with tax and business insights, you can always visit our COVID-19 Resource Centre.
Tell me more about the interest relief
The government announced tax relief for people who accessed COVID-19 programs in 2020. If you’re eligible, you won’t be charged interest on any balance owing on your 2020 individual income tax return until April 30, 2022.
You must meet the following criteria to qualify for interest relief:
- Your 2020 taxable income was $75,000 or less.
- You filed your 2020 income tax and benefit return.
- You have a balance owing for your 2020 taxes, AND
- You received at least one COVID-19 benefit in 2020:
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Recovery Sickness Benefit (CRSB)
- Employment insurance (EI) benefit
- Provincial or territorial emergency benefits
NOTE: Late filing penalties still apply. (A quick refresher: you’ll be charged 5% interest after the due date plus an additional 1% per month up to a maximum of 12 months).
How do I apply?
If you’re eligible, the CRA will automatically apply interest relief to your tax bill, so you don’t need to fill out an application.
Applications for claim period 12 (January 17 to February 13, 2021) are now open for the Canada Emergency Wage Subsidy (CEWS). The government also announced proposed details for upcoming CEWS claim periods 14-16 (March 14 to June 5, 2021). The maximum wage subsidy rate for active employees will remain at 75%.
Remind me, what is CEWS?
CEWS is a wage subsidy program for employers who have experienced a drop in revenue due to the pandemic. The program will help you keep your employees on payroll, or help you re-hire your employees, so you can resume normal operations as much as possible once this crisis is over. If you qualify, the government will subsidize a portion of your employees’ wages, retroactive to March 15, 2020.
To make it easier for more employers to access CEWS, the federal government has made many changes and adjustments to the program since March. As a result, CEWS is a complex program that can cause confusion for business owners when navigating CEWS claim periods. For a refresher on how the subsidy works, who qualifies, and how to apply, click here.
Canada Emergency Rent Subsidy (CERS) update
The Canada Emergency Rent Subsidy has been extended to June 15th, 2021.
I need a quick refresher on CERS…
The Canada Emergency Rent Subsidy (CERS) provides rent and mortgage support to qualifying businesses, charities, and non-profits. The subsidy covers eligible fixed property expenses, including rent.
The rent subsidy is structured like the Canada Emergency Wage Subsidy. It’s available on a sliding scale to business owners, with the amount your business receives proportional to your revenue loss.
The CEBA loan deadline is quickly approaching. You have until March 31, 2021 to apply for a $60,000 CEBA loan to help you with any cash flow issues you may be facing due to COVID-19. If you submitted a CEBA application when the loan was only $40,000, you also have until the end of the month to apply for an additional $20,000.
What is CEBA?
The Canada Emergency Business Account (CEBA) is a $60,000 loan program (up from $40,000 when it was originally announced). The best part of the loan is that it’s interest free until December 31st, 2022, and up to $20,000 of the loan is forgivable if you repay it by then.
Featured Resource: CEBA Application Tip Sheet
Have questions about this or other COVID-19 programs for Canadian businesses? Unlimited consultation related to tax matters is a key benefit of FBC Membership. We’re offering a free consult where we get to know your business and determine next steps on saving you time and money. Request your consultation online.