Interest Relief and Extension of Payment Deadline on Outstanding Tax Debts during Covid-19

On July 27, 2020, the Canada Revenue Agency (CRA) announced that it will be extending the due dates for some returns and payments. The original extended due date was September 1, 2020 and a further extension has been granted till September 30, 2020.

Filing Deadlines

Individuals

The T1 personal tax filing deadline has been extended till September 30, 2020. It’s important to keep the following in mind.

  • Try to file as early as possible especially if you’re receiving benefits such as the Canada Child Benefit.
  • If the CRA does not receive your T1 return by early September then it’s possible that these benefits might stop in October 2020 and the individual might have to repay some benefits.

Corporations

The normal six month filing deadline will apply for corporations with year ends on April 1, 2020 or later.

If corporations have year ends ranging from November 30, 2019 till March 31, 2020 then their T2 return filing deadline has been extended to September 30, 2020.

Trusts

Trusts with year ends on July 3, 2020 or later will have the normal 90 day filing deadline.

However, trusts with year ends between March 2, 2020 and July 2, 2020 will have an extended filing deadline till September 30, 2020.

Income Tax Installments

The deadline for remittance of income tax installments has also been extended to September 30, 2020. This applies to installments due between March 18, 2020 and September 30, 2020.

Waives on Interest

The CRA is waiving interest on income tax debts for 6 months from April 1 to September 30, 2020. This applies to individuals, corporations and trusts.

Interest is also being waived on GST/HST returns for 3 months from April 1 to June 30, 2020.

Important Note

  • In order to benefit from these extensions and avoid late filing penalties, we strongly advise that all income tax balances or installments which were due on or after March 18, 2020 and before September 30, 2020 should be paid by September 30, 2020.
  • Tax payers will not be charged penalties as long as returns are filed and any taxes owing are paid by September 30, 2020.
  • We are waiting to find out if this extension also applies on other returns or tax election forms such as T106, T1134 and T1135 foreign reporting forms.
  • Payments for cross-border withholding taxes, other GST/HST and payroll have not been extended.

For advice on your specific situation, contact the team at Syed A. Raza Professional Corporation today.

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