GOVERNMENT (CANADA) – UPDATES
As businesses and individuals navigate through the pandemic, Southbrook Consulting is on your side as a trusted advisor.
Like you, we must regularly assess and adjust our actions to reflect the local COVID-19 situation. Although we have embraced virtual platforms like Zoom, nothing can replace in-person meetings with our clients and friends. With December now upon us, we want to ensure you are informed to adapt to this dynamic business environment.
Below, we have summarized important information about approved updates to some key government relief programs and CRA reporting requirements.
- The government has extended CEWS to June 2021. However, they have only announced the details of the calculations up to the end of period 10 (December 19, 2020).
- Effective for period 5 and onward, the subsidy rate varies depending on how much your revenue has dropped and is comprised of a base rate and a top-up rate for those most adversely affected.
- The maximum subsidy rate for period 8-10 will remain is 65%.
- The deadline to apply for periods 1-5 is January 31, 2021.
- The deadline to apply for periods 6-10 is 180 days after the end of the claim period, whichever comes later.
- CEWS payments are considered government assistance and are taxable at the end of the claim period to which the payment relates. Should you intend to make a claim for a CEWS period that falls during your fiscal year-end, please advise us if Southbrook is doing your bookkeeping and Accounting work.
To learn more about the CEWS, CONTACT THE CRA AT CEWS QUESTIONS
NEW T4 REPORTING REQUIREMENT FOR THE TAX YEAR 2020
CRA announced that all Canadian employers must report additional detail on their 2020 T4 slips. This additional information is intended to help validate payments made to individuals under the Canada Emergency Response Benefit (“CERB”) and payments made to employers under CEWS. In addition to reporting employment income in Box 14, you must use these other information codes when reporting employment income and retroactive payments in the following periods:
- Code 57: Employment income – March 15 to May 9
- Code 58: Employment income – May 10 to July 4
- Code 59: Employment income – July 5 to August 29
- Code 60: Employment income – August 30 to September 26
Each period pertains to the day the employee was paid, and not the period of work the payment covered.
Half of this additional financing, up to $10,000, will be forgivable if the loan is repaid by December 31, 2022.
This means the additional loan effectively increases CEBA loans from the existing $40,000 to $60,000 for eligible businesses, of which a total of $20,000 will be forgiven if the balance of the loan is repaid on time.
Find more information here: CEBA Loans
Over the last few months, we have helped many of our clients in getting more money than they first thought. It has been frustrating for many as the rules of each claim period keeps changing. If you are unsure and wonder if you have capitalized on all the potential CEWS, contact us directly at email@example.com WE CAN HELP!