On March 18, 2020, Prime Minister Justin Trudeau announced the government is introducing an economic aid package to help Canadians and businesses cope with the COVID-19 pandemic.
The package provides up to $27 billion in direct supports to workers and businesses, and $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals.
Below, we have provided an overview of the proposed measures that impact self-employed individuals and small businesses.
Individuals
The deadline to file your income tax and benefit return will be deferred until June 1, 2020.
The CRA will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
Self-employed and Spouse or Common Law Partner
For self-employed individuals or those who have spouses or common-law partners that are self-employed, the deadline to pay any balance due for your individual income tax and benefit return has been deferred to August 31, 2020, however your income tax and benefit returns still needs to be filed by June 15, 2020.
Businesses
The CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
Trusts
For trusts with a taxation year end of December 31, 2019, the filing due date of March 31, 2020, will be deferred to May 1, 2020.
Furthermore, all trusts that have an upcoming income tax balance due date or an income tax instalment payment due date before August 31, 2020, will have their payment due date effectively extended to August 31, 2020.
Penalty and interest implications for upcoming trust tax obligations not covered by the relief described above will be considered by the CRA on a case-by-case basis.