BMP ACCOUNTING & TAX INC.

This has been the year of adjustments. A huge number of businesses have had to reinvent how they handle their day-to-day business. It is no surprise that T4’s have not been spared.

For the 2020 tax year, employers will be expected to report pandemic-related benefits in the other information on T4 slips in an effort to track payments. This means that income earned from an employer between specific time frames must be reported under specific codes.

Another addition to T4’s this year is the amount of CEWS you used for each employee’s salaries by using special codes in the “other information” portion. CRA will release more information about the specific reporting requirements at the end of the year.

If you qualified for the 10% Temporary Wage Subsidy, you will first have to keep all payroll records including your calculations for eligible employees. You are also required to submit a form for each of your payroll accounts. CRA will use information submitted in you’re the form you submitted to reconcile each payroll account.

Do you have more questions regarding T4s and T5s? Contact Us.

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Are you the owner of an incorporated business? Did you know BMP loves corporate tax returns? Among our partners, we have a collective of 45 years of experience with corporate tax returns and one of our partners was tax auditor with CRA and the province. We are able to provide quality products for a reasonable price point (our corporate returns start at $500).

We can help you navigate CRA audits, tax objections, disclosures and appeals, corporate tax filing and planning and personal tax planning for owners, and filing corporate tax returns. We file returns electronically and we provide you with financial statements along with analysis on your financial position. We can help you understand how to be more profitable and how to pay yourself and other shareholders better.

As part of preparing your corporate return, we can file your WCB return, and file your T4s, T4As and T5s. If you have employed contractors during the year, we can issue them a T4A on your behalf. T5s are issued when the corporation issues dividends.

Do you have more questions regarding tax implications of owning a corporation? Contact Us.

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As many Canadian businesses were forced to close their doors and later modify how they do business in a World during a global pandemic, Canadians struggled to make ends meet. The Canada Emergency Response Benefit (CERB) and Canada Emergency Student Benefit (CESB) were launched in March and May respectively to relieve some of the pressure. Employers deduct taxes prior to depositing their employees’ pay into their account. However, this was not the case with CERB and CESB benefits.

What does this mean? CERB and CESB are taxable benefits and so you may owe CRA some taxes next tax season if you have earned other income for the year. If you have made less than $13,229 during 2020 you will not have to pay taxes on your income, including CERB and CESB installments.

There are many factors that will affect taxes owing for folks who made over $13,229 in 2020 such as a change in your tax bracket. However, if your income has decreased in 2020 you may be eligible for child credits or GST credits you would have not qualified for previously.

If you have received CERB or CESB payments, chances are you may be experiencing financial hardship and may find it difficult to put money aside for taxes you may owe in April. Contact us to find out what we can do to help.

Do you have more questions about CERB and CESB? Contact Us.

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CEBA was originally launched on April 9th, 2020 and was intended to help businesses pay non-deferrable expenses. The eligibility criteria was expanded in June to include businesses that did not have payroll, sole proprietors and family-owned corporations that pay their shareholders in the form of dividends instead of payroll. Loans of up to $40,000 are extended to small businesses and not-for-profits.

If your payroll was $20,000 or less in 2019 you will have to prove that your eligible non-deferrable expenses total between $40,000 and $1,500,000 in 2019. CEBA applicants may go under a CRA audit to establish the eligibility of their CEBA and inaccuracies may have legal consequences.

The loan must be spent by December 31, 2020 and must be paid back by December 31st, 2022 for the 25% forgiveness. If you were eligible for a $40,000 loan your loan forgiveness will be $10,000 compared if you are eligible for a $20,000 loan, your loan forgiveness would be $5,000. This includes businesses that took a $40,000, but only had $20,000 of eligible expenses. Your forgiveness is based on your eligible expenses paid by the loan and not the total loan itself.

Got more questions regarding CEBA? Contact Us.

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Your Finances and COVID-19 Provincial Update

3/23/2020

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Today, our Premier presented an update on measures the provincial government will be rolling out to combat the financial difficulties Albertans are feeling. We wanted to put a list together for you in case you did not catch the live update.

1) Taxes: The government is keeping the property education tax the same as last year. What this means for you is a decrease in your 2020 proposed property taxes.

Note municipalities are working as well for further tax breaks. However, these have not been released yet.

If you own commercial land, the provincial education tax will be deferred until October 2020. In 2020, commercial land owner will only be responsible for 50% of the provincial education tax.

There is also a business tax deferral program.

These efforts are to free up some funds to keep people employed and that commercial landlords pass on these savings to their commercial tenants through lease payment deferrals or other means.

2) Utilities: Residential, farm and small commercial customers can call their utility provider directly to defer all payments for 90 days.

More Information:
https://www.alberta.ca/assets/documents/covid19-90-day-utility-deferral.pdf

Elimination of Alberta Energy Regulator fees for energy producers in 2020.

3) Financial Assistance: There is a $1,146.00 bi-weekly payment for emergency self-isolation payments. See alberta.ca to apply.

AB Treasury Banks and Credit Unions have direction from the province to provide mortgage payment relief as well as business and personal loans.

Student Loan payments are deferred. The government will be covering the interest for the period of the deferred loan payments.

Increase funds to shelters to help with the increase in demand.

4) Workers Compensation Board (WCB): WCB premiums for small & medium businesses will only be responsible for 50% of their 2020 premiums. If you have already paid your premiums you are due a reimbursement upon request.

Note that this does not affect coverage for employees. Your coverage stays as is.***

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We want you to know that we understand that amidst this global pandemic you may be experiencing higher than usual stress levels. Although we may not have the answers to health questions, we can address some of your financial concerns.

Canada's six biggest banks (Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank) have announced offers of financial assistance, including by allowing some delay mortgage payments for as much as half a year.

Today, Tuesday, March 18, 2020, our Prime Minister announced what steps they are taking to manage our financial concerns. The following actions are not exhaustive as the government will continue to monitor how to best help Canadians.

Individuals that don't have access to Employment Insurance:

There are new measures to enable people who do not have access to EI pay (comparable to what you would receive in EI) every two weeks for 14 weeks.

Two programs that will be put into place:
1. Emergency Care Benefit - for people who are ill, placed in quarantine, have to self-iisolate have to care for a loved one who has COVID 19 but fail to qualify for EI
2. Covid 19 Emergency Support Benefit - for people who lose your job or if you are self-employed and you have to close your shop
Tax Deferrals

Canadians should have access to these funds within two weeks.

More details (https://www.ctvnews.ca/health/coronavirus/how-to-apply-for-ei-sickness-benefits-and-the-new-emergency-worker-fund-1.4858089)

For Small Businesses:

To help you retain staff, the Government of Canada is rolling out a subsidy that pays up to 10% of salaries for a period of three months.

Tax Season:

If you have filed your taxes and you owe money to the government you will have until August 2020 to pay your balance.
The tax filing deadline has been pushed to June 1st (it was April 30th prior to the announcement).
More details to come for more tax implications for those in the vulnerable sector and/or affected most by the virus.

Parents:
Canada Child Benefit will be increased in the coming months to counteract higher childcare costs.

GST Boost:
In May there will be an increase in the GST credit for lower-income folks to offset the sales tax they pay. Every qualifying adult will receive up to $300 + $150 for every child.

Student Loans:
Six-month interest-free repayment pause for student loans

Homeless People and Shelters:
A doubling of funds to Reaching Home Program
Boost funding for shelters

First Nations
Distinction-Based Indigenous Community Support Fund

Additional Support to Businesses:
Export Development Canada will provide support to Canadian companies affected by the global situation
Boosts Farm Credit Canada for farmers and primary food producers

Stay well.

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What is important to you is important to us.

T4's - 2020 Issues

We Love Corporate Tax Returns

Tax Help: CERB & CESB

CEBA

Your Finances and COVID-19 Provincial Update

Your Finances and COVID 19

Mélanie Brochu-Macaulay

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