Here are some important updates and resources for taxpayers and business owners during the still unfolding COVID-19 situation.

“While it is tax season, the government said for individuals, the return filing due date will be deferred until June 1, 2020. The Canada Revenue Agency will also allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.”
from “Federal government unveils $82 billion pandemic aid package for Canadians”
Daily Hive
March 18, 2020
Read more here.

“Corporations are still required to file their income taxes six months after their fiscal year ends, but similar to the personal tax changes, businesses will be able to defer tax payments until August 31 without incurring interest or penalties.”
from “Feds extend tax filing deadline, waive interest on balances owing”
BNN Bloomberg
March 18, 2020
Read more here.

The Government of Canada is taking immediate, significant and decisive action to help Canadians facing hardship as a result of the #COVID19 outbreak.
from Canada’s COVID-19 Economic Response Plan: Support for Canadians and Businesses
Government of Canada
March 18, 2020
Read more here.

Thinking of you, clients, colleagues, friends, fellow citizens – be safe and be well!

We’re here if you need us.

As T4 Statement of remuneration paid information slips are starting to be prepared and issued to Canadian taxpayers, here’s a reminder to keep in mind the new (2017) rules for Electronic Distribution of T4 slips:

The employer can only issue T4 slips electronically without the employee’s consent if the employer provides to the employee, by the last day in February following the calendar year to which the slip applies:

• a secure electronic portal through which the employee can obtain access their T4 information slip
• a secure site for printing the T4 slip, and
• an option to receive paper copies of the T4 slip, upon request.

Here is the link to more information on the Canada Revenue Agendy (CRA) web site: Electronic Distribution of T4 slips.

Do you or a loved one qualify for the Disability Tax Credit?

If you or someone you know is sick or disabled, they may qualify for the Disability Tax Credit Certificate. This will allow them to get a non-refundable tax credit of $8,416.

When you apply for the first time, you will not get the credit automatically. It must be reviewed by CRA and can take a few months to process. Usually when it is submitted you are sent a letter asking if you want to wait for the review or they can process your return without it and do an adjustment if it is approved. CRA will also adjust other years if your doctor says the disability started in another year.

Before you fill out the application, you should ensure that you or your loved one meet the qualifications below:

1. The sickness or disability must markedly restrict daily living activities.
2. Part of the form must be filled out by one’s physician.
3. The areas that CRA uses for its determination are as follows:
• Vision
• Speaking
• Hearing
• Walking
• Eliminating
• Feeding
• Dressing
• Mental functions
• Life-sustaining therapy

If you believe you or your loved one will qualify, Nevcon Accounting can email you the form or you can download it from here.

This article was featured in our most recent edition of The Financial Enquirer quarterly email newsletter. Click here to subscribe.

If a tax-related promotion sounds too good to be true, it probably is. Before you’re tempted to click on a link or make a call, check first with your tax professional or the Canada Revenue Agency (CRA).

Through this web site and our email newsletter, Nevcon Accounting will highlight new variations of tax scams that are making the rounds. For example, the Canada Revenue Agency (CRA) is warning Canadians about getting involved in tax schemes where promoters, including some tax representatives and tax preparers, are claiming that individuals can get a significant tax write-off by investing in real estate through a limited partnership.

What are tax schemes?

Tax schemes are plans and arrangements that attempt to deceive taxpayers by promising to reduce the taxes they owe, for example through large deductions or promises of tax-free income. Schemes can also include other creative ways to convince people they could pay less taxes.

Here’s how this scheme works:

This scheme is advertised as an investment opportunity in real estate through a limited partnership. It is usually heavily promoted as a product with a significant tax advantage and limited liability for the investor. The promoter of the scheme promises a tax write-off for more than double of what was invested.

Potential investors are advised that they can claim a significant tax write-off because of costs being expensed in the initial year of the project. For example, the investor has invested $5,500 and is advised that they can write it off on their taxes for $12,500 due to financial services, lease enhancement and tenant improvement costs expensed in the first year. This is not the case.

Limited partnerships are unique arrangements that provide investors with certain benefits similar to partnerships and corporate entities. However, different than general partnerships, the investor’s liability is restricted to the amount they invested. Therefore, they cannot claim a higher tax write-off than invested.

Your actions may have serious consequences.

Through increased audits of promoters, improved information gathering and informing taxpayers on how to recognize tax schemes, the CRA continues to identify and shut down tax schemes.

Those who choose to participate in these schemes, as well as those who promote these schemes, face serious consequences, including penalties, court fines and even jail time.

What can you do to protect yourself and other taxpayers from tax schemes?

• Get professional, independent advice before investing, especially if a deal seems too good to be true.
• If you have participated in a scheme, come to CRA to correct your tax affairs through their Voluntary Disclosures Program … before they come to you.