The last year has been unpredictable for most people, right down to their income. Business closures, layoffs and slowdowns have seen more people than ever applying for Employment Insurance (EI) or tapping into a broad range of COVID-19 relief programs, including the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Caregiving Benefit (CRCB), and Canada Recovery Sickness Benefit (CRSB). Revenue Canada Agency (CRA) recently announced that those who collected these benefits in 2020, had a taxable income of $75,000 or less, and filed their 2020 income tax and benefit return will not be charged interest on any taxes owing until April 30, 2022. Eligibility criteria to receive interest relief from CRA is available online.
Sharlane Bailey, owner of Canwest Accounting, explains that many of the COVID benefits did not have taxes deducted, so many taxpayers now owe income tax on those earnings.
“A lot of people who found themselves without a paycheque and having to collect the CERB during the lockdown last year spent the entire amount on rent, food, and supporting their families,” Sharlane said. “Now we’re seeing that they owe money and don’t have funds saved up because we’re still seeing business closures.”
While eligible taxpayers will receive interest relief, that’s no reason to delay filing your taxes. Personal income tax returns are due on or before April 30, and self-employed tax returns are due on or before June 15. If you owe and file late, you will still be charged a late-filing penalty of 5% of your 2020 balance owing, as well as 1% for each month you are late filing.
Sharlane says that tax returns are more complicated than in the past due to all the recovery benefits. The tax preparation experts of Canwest Accounting have been receiving many questions from individuals trying to navigate their tax return paperwork and the extra boxes on some of the forms.
To have the exceptional team at Canwest Accounting save you time and money by preparing your tax return, please call or email us, and fill out our Personal Tax Checklist, (filing by April 30 can’t be guaranteed if received after April 16th). Our offices in Victoria and Langford are still closed to the public to keep everyone safe during the COVID-19 pandemic, but we have a pickup and drop off service that is very convenient.
The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.