Canwest Accounting is seeing more of its clients’ businesses reopening, as many qualify for help through the Canada Emergency Wage Subsidy (CEWS) program in place until at least Aug. 29, 2020. Other clients’ businesses have returned to near-normal levels and no longer collect the wage subsidy of 75% of employee wages for up to 24 weeks. CEWS applies to a variety of companies and non-profit organizations that can demonstrate a drop in revenue of at least 30% over the same period last year. Canwest Accounting helps its clients to fill out the applications to claim the subsidy. Sharlane Bailey, owner of Canwest Accounting, reminds everyone to keep in mind that the subsidy is taxable.
“Since business owners will need to pay tax on the subsidy, it’s possible that once you pay out the funds in wages, it may not improve a business’ cash flow,” said Sharlane. “We can help businesses to monitor this month by month.” Check here for the latest on the CEWS.
For other businesses reopening, the staff at Canwest Accounting helped clients to apply for the interest-free Canada Emergency Business Account (CEBA) loan of up to $40,000, implemented through eligible financial institutions. Up to $10,000 of the loan or 25 percent will be eligible for complete forgiveness if $30,000 is fully repaid on or before Dec. 31, 2022. Several more businesses qualified for CEBA once the criteria changed on June 26, 2020, to include owner-operator small businesses without a payroll, sole proprietors receiving business income directly, as well as family-owned corporations paying out dividends in lieu of a traditional payroll. Applicants still need to demonstrate having eligible non-deferrable expenses of between $40,000 and $1.5 million in 2020. Once Canwest assisted clients with filing the application, most businesses received the funds fairly quickly. For more information, here is a link to CEBA.
Sharlane also reminds recipients of the Canada Emergency Response Benefit (CERB) to keep in mind that while they are not currently being taxed on the $500 per week benefit, they will be taxed next April when they file their income tax return.
To have the exceptional team at Canwest Accounting save you time and money by answering your questions, doing your bookkeeping, or preparing your tax return, call or email us. Our offices in Victoria and Langford are still closed to the public while we put in place protocols to allow for social distancing, 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.