The Canada Revenue Agency (CRA) is closely monitoring the COVID-19 situation, and is committed to supporting Canadians throughout it. The CRA understands that individuals and businesses might be dealing with difficulties in meeting their financial obligations, including paying tax debts they may have incurred prior to the crisis. In addition to measures already announced, the CRA is extending the payment deadline and applying relief to interest on existing debt.
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.
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. While this measure for existing tax debts does not cancel penalties and interest already assessed on a taxpayer's account prior to this period, it ensures that a taxpayer's existing tax debt does not continue to grow through interest charges during this difficult time. This measure provides immediate relief to impacted taxpayers.
Filing returns
The previously extended filing due dates for individual, corporate, and trust income tax returns remain unchanged. However, recognizing the difficult circumstances faced by Canadians, 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.
The CRA encourages everyone to file their individual, corporate and trust returns as soon as possible, even though payment deadlines are being extended. This is particularly important for individuals receiving credits and benefits, such as the Canada Child Benefit.
To ensure Canadians continue to receive their benefits and credits during the COVID-19 pandemic, the CRA temporarily suspended interruptions for those who were unable to file their income tax and benefit return by the June 1 deadline. Currently, if a 2019 individual tax return has not been assessed, the CRA is calculating benefits and/or credits for the July to September 2020 payments based on information from 2018 tax returns. However, if 2019 individual tax returns are not received and assessed by early September 2020, estimated benefits and/or credits will stop in October 2020 and individuals may have to repay the amounts that were issued as of July 2020. The CRA has helpful information and a step-by-step guide to help Canadians complete their taxes. The CRA tax processing system is fully operational and returns are being processed quickly to support Canadians in getting their refunds and ensuring continuity of their benefits.
COVID-19 measures
The Government of Canada previously announced fiscal measures to help Canadians during this period, some of which affect tax-filing and payment deadlines. Below are some of the important changes that were announced:
- Extensions to tax-filing and payment deadlines
- New emergency credits and measures (Canada Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Student Benefit (CESB))
- A one-time special payment to the GST/HST credit and a one-time increase to the Canada Child Benefit (CCB) payment in May
- Reduced minimum withdrawals for Registered Retirement Income Funds (RRIFs)
- Electronic signatures for authorization of certain forms
- Deferring GST/HST remittances and customs duty payments until June 30th, 2020
