The global pandemic has taken the world’s economy by storm by disrupting established deadlines and submissions for tax forms for the previous quarter. The Canada Revenue Agency (CRA) has been working on extending tax form deadlines to ensure that local businesses affected by the pandemic can focus on adjusting their bookkeeping to account for their finances.
Provisions in response to the pandemic
The CRA has recently announced filing extensions for trust (T3) and corporate (T2) income tax returns in light of the current global crisis. The CRA updated its tax deadline page to include these extensions and interest relief for individuals on their announcement last May 22. It included information about penalties that will not be applied on form T1135 for individuals that must be filed with the T1 return, as long as they are registered by September 1, 2020.
CRA-approved corporate tax filing extensions
Income tax filing deadlines for corporations that would have been due between March 18, 2020 and May 31, 2020 have been extended to June 1, 2020. Corporate income tax filing deadlines are normally six months after the corporate year-end. This means that if your corporation has a year end falling between September 18th and November 30th, you don’t have to file until June 1, 2020.
CRA-approved corporate tax balance extensions
Normally, any corporate taxes owed are due two months after the corporate year-end. The CRA has extended the balance deadlines for corporate T2s to September 1st, 2020. This applies to balances that become due between March 18, 2020 and September 1, 2020. If your corporate year-end falls between January 18, 2020 and September 1, 2020, you qualify for this extension. Keep in mind that this only applies to Part 1 tax.
Late-filing relief for 2019 personal tax returns
Though the CRA ultimately decided that 2019 personal tax returns should not be extended similarly, they provide relief on interest and penalties for returns filed after June 1. No incidence of penalties or interest will be charged to payments made until September 1, 2020.
Meanwhile, there has been no clear statement on how the provisions affect self-employed individuals and their partners. Instead, these specific taxpayers are permitted to use a general waiver of interest and penalties if their returns are filed between June 15 and September 1, 2020. Personal tax installments due on June 15, 2020, have been extended to September 1, 2020. Considering corporate and trust returns, the CRA is expected to make an announcement as soon as they’ve found a sufficient alternative ready for implementation.
Though the CRA is doing its best to adjust deadlines to support the economy, business owners are still worried about the long-term effects of the pandemic. It can be difficult to estimate just how heavy of an impact COVID-19’s damage has done to returning businesses, not just on one’s financial standing but also in adapting to accounting policies.
Depending on the country’s support to both local and international enterprises, many business owners may need to rethink their company’s current business models. The best way to ensure that an enterprise will last in the coming months is to keep a close eye on market trends to see the next best course of action.
If you need accounting services in Halifax, NS, we offer expert handling in making sure that your accounts stay organized and up-to-date. Get in touch with us today!