Update from CRA – Extension to Payment Deadline and Interest Relief on Outstanding Debt

Update from CRA – Extension to Payment Deadline and Interest Relief on Outstanding Debt

On July 27, 2020, the Canada Revenue Agency (CRA) made the following announcements to further support taxpayers dealing with the COVID-19 situation.

Payment Deadline Extension

The CRA is extending the payment due date for current year individual, corporate, and trust income tax returns, including instalment payments, from September 1, 2020 to September 30, 2020. Penalties and interest will not be charged if payments are made by the extended deadline of September 30, 2020. This includes the late-filing penalty as long as the return is filed by September 30, 2020.

Individuals – Deadlines

    • Filing date for 2019 tax year – June 1, 2020 filing deadline
    • Payment date for 2019 tax year – September 30, 2020 (NEW EXTENSION)
      • Penalties (including late-filing penalties) and interest will not be applied if returns are filed and payments are made by September 30, 2020. This also applies to the June 15 and September 15, 2020 instalments payments for those who have to make instalments.

Corporations – Deadlines

Filing date for the current tax year:

    • June 1, 2020 filing deadline
    • Applies to corporations that would otherwise have a filing deadline after March 18 and before May 31, 2020. Although this
    • September 1, 2020 filing deadline
    • Applies to corporations that would otherwise have a filing deadline on May 31, or in June, July or August 2020.
    • This extension also applies to forms T106 and T1135, and any elections, forms and schedules that must be filed with the return.

Payment date for the current tax year – September 30, 2020 (NEW EXTENSION) 

    • Applies to balances and instalments due on or after March 18 and before September 30, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 30, 2020. Even though the tax filing due date, there is no penalty for filing on September 30, 2020.

Trusts – Deadlines

Filing date for the current tax year:

    • May 1, 2020 filing deadline
    • Applies to trusts with a tax year end date of December 31, 2019.
    • June 1, 2020 filing deadline
    • Applies to trusts that would otherwise have a filing due date after March 30 and before May 31, 2020.
    • September 1, 2020 filing deadline
    • Applies to trusts that would otherwise have a filing due date on May 31, or in June, July, or August 2020.
    • This extension also applies to forms T106 and T1135, and any elections, forms and schedules that must be filed with the return.

Payment date for the current tax year

    • September 30, 2020 (NEW EXTENSION)
    • Applies to income tax balances and instalments due on or after March 18 and before September 30, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 30, 2020.
      • This also applies to the Part XIII remittance requirement associated with income paid or payable to non-resident beneficiaries.

Interest on Existing Tax Debt

The CRA is also waiving interest on existing tax debts related to individual, corporate and trust income tax returns from April 1, 2020 to September 30, 2020 and from April 1, 2020 to June 30, 2020 for goods and services tax/harmonized sales tax (GST/HST) returns. Please note that this measure for existing tax debts does not cancel penalties and interest already assessed on a taxpayer’s account prior to this period.

Filing Returns

The previously extended filing due dates for individual, corporate and trust income tax returns remain unchanged. However, the CRA will not impose late-filing penalties where a current year individual, corporation or trust return is filed late provided that it is filed by September 30, 2020.

GST/HST Payments

Earlier this year, the CRA allowed all businesses to defer, until June 30, 2020, any GST/HST payments or remittances that became owing on or after March 27, 2020 and before July 2020. This meant that no interest would apply if GST/HST payments were made by June 30, 2020. There have not been any subsequent extensions for GST/HST payments. Therefore, HST/GST payments and filings after June 30, 2020 must be made on time to avoid interest and penalties.

Leave a Reply