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Important changes for tax filers after COVID-19 pushed CRA's deadline back

·4 min read
How to do your taxes
REUTERS/Chris Wattie

Canadian tax-filers got a bit of a reprieve because of COVID-19, but the deadline to file is once again upon us.

The federal government extended the deadline from April 30th to June 1st in March.

“This deadline is of particular importance to those who have a balance owing because a penalty will be charged if you have not submitted your tax return by that date,” Gerry Vittoratos, national tax specialist at UFile, told Yahoo Finance Canada.

“The deadline to pay any amount owing to the CRA is extended to September 1st, and this includes any tax installments due on June 15th.”

The June 15th deadline for self-employed filers hasn’t changed, but the deadline to pay has been extended to September 1st.

“The dates above are not as binding for taxpayers who have refunds since they do not owe anything to the government,” said Vittoratos.

“However, for the CRA to properly process certain benefits, such as the GST credit and Canada Child Benefit, it is recommended to file your tax return by the June 1st deadline.”

Earlier this week, Prime Minister Justin Trudeau announced corporations who have to file T2 corporate income tax or a T3 trust income tax in June, July, or August will be able to submit it by September 1.

Changes to remember when you file

Home Buyer’s Plan limit increase

The withdrawal limit for the Homer Buyer’s Plan has been increased from $25,000 to $35,000.

Cannabis products eligible for the medical expense credit

Marijuana, marijuana plants or seeds, cannabis or cannabis oil purchased after October 16, 2018 can be eligible for the medical expense credit if used for personal medical use and in accordance with the Access to Cannabis for Medical Purposes Regulations or section 56 of the Controlled Drugs and Substances Act.

Canada Training Credit (2020)

Starting in 2019, you can accumulate a $250 per year limit towards an upcoming 2020 refundable credit called the Canada Training Credit (CTC). The credit itself will reimburse a portion of eligible tuition and other fees paid for courses taken in 2020 and subsequent taxation years.

Zero-emission vehicles

If you’re self-employed and you purchased a zero-emission vehicle after March 18, 2019 for use in your business, you can fully expense the cost of the vehicle against your business income.

Canada Workers Benefit

The Working Income Tax Benefit (WITB) has been renamed and enhanced with the Canada Workers Benefit (CWB). It is a refundable tax credit that provides tax relief for eligible low-income individuals and families in the workforce.

For 2019, the maximum benefit of the CWB has been increased by $170. The income level at which the benefit is phased out completely has also been increased. The maximum benefit provided through the CWB disability supplement is also increased by an additional $160.

COVID-19 benefits to keep track of for next year

COVID-19 benefits won’t be factored into this year’s return, but there are a number of things individuals and businesses should consider and keep track of.

Benefits for businesses — which include CEWS, CEBA, and CESB — are taxable income and will be part of next year’s return.

CERB payments for individuals are taxable but aren’t taxed at the source. H&R Block suggests setting some money aside, in case of a tax bill next season. It also says you should monitor all money coming in.

“CERB recipients should be tracking any unexpected income they are receiving to make sure they still meet the eligibility requirements. The CRA are currently processing applications on a no-questions-asked basis.” H&R Block told Yahoo Finance Canada.

“However, there will be some back-checking at some point, probably when people file their returns next tax season.

People working from home are also in line for tax relief next year.

“If you are working from home you should be tracking home-office expenses such as printing paper and stationery along with utility and maintenance bills (of which you will be able to claim a prorated portion relating to your office).” said H&R Block.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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