Re: Ontario Regional Opportunities Investment Tax Credit

A note on the Ontario Regional Opportunities Investment Tax Credit,

• 10% refundable tax credit for certain corporations that invest between $50,001 and $500,000 to construct, renovate or acquire eligible commercial and industrial buildings (or other structures) that become available to be used in the business after March 24, 2020. Residential buildings are not eligible for this tax credit, as well as the portion allocated to land. Further, the 2021 Ontario Budget announced a temporary enhancement to the ROITC to provide an additional 10% (total of 20% between $50,001 and $500,000) during the March 24, 2021 to December 31, 2022 period.

• Expenditures incurred after the taxation year in which the property first becomes available to be used in the business will not qualify for the ROITC or temporary enhancement.

• When both the ROITC and the temporary enhancement are being claimed, the maximum credit is $90,000 per year (($500,000 – $50,000) x 20%). The credit is claimed when filing the corporate income tax return, by completing schedule 570, and must be shared among an associated group of corporations. Where a claim is made, each of the other corporations in the associated group must waive its right, in writing, to claim the ROITC.

• The claiming corporation must be a CCPC and have a permanent establishment in Ontario.

• Regardless of the location of the business or head office, the physical property must be located in certain designated regions (including the County of Elgin together with the City of St. Thomas, the County of Oxford and the County of Middlesex with the City of London). A full list of regions can be found on the Ontario government website (https://www.fin.gov.on.ca/en/bulletins/roitc/index.html).

 

Please contact us anytime should you have any questions or wish to discuss.

Re: Immediate Expensing of Depreciable Capital Assets

A note on the Immediate Expensing of Depreciable Capital Assets,

• The Federal Budget 2021 proposes to permit the full cost of eligible property acquired by a Canadian-controlled private corporation (CCPC) (i.e. incorporated in Canada and not controlled by non-residents) on or after Budget Day (April 19, 2021) to be deducted, provided the property becomes available for use in the business before January 1, 2024.

• Up to $1.5 million of expenditures per taxation year is available for immediate expensing and shared among each associated group of CCPCs. For CCPCs with less than $1.5 million of expenditures in a year, there is no carry forward of unused capacity into following years. For CCPCs with more than $1.5 million of expenditures, normal rules apply.

• Eligible property includes depreciable capital property, other than property included in the following CCA classes, among others:
– Class 1 to 6 (buildings) – Class 17 (communications equipment)
– Class 14.1 (purchased goodwill and eligible capital property)

 

Please contact us anytime should you have any questions or wish to discuss.

Ontario Small Business Support Grant

Applications are now open for the new Ontario Small Business Support Grant. This grant is designed to help small businesses that are required to close or significantly restrict services under the Province wide Shutdown that came into effect December 26, 2020.

Up to $20,000 is available in the form of a grant to help cover the decrease in revenue because of the Shutdown. Businesses must be able to demonstrate that they had experienced a revenue decline of at least 20% when comparing monthly revenue in April 2019 and April 2020. Businesses established after April 2019 may also be eligible assuming they meet the other criteria.

To receive the grant, the business must meet all of the following eligibility requirements:

  • They were required to close or restrict services subject to the Province wide Shutdown effective 12:01 a.m. on December 26, 2020.
  • Have fewer than 100 employees at the enterprise level.
  • Have experienced a minimum 20 per cent revenue decline when comparing April 2020 to April 2019 revenues.

Businesses that are not eligible include those who were already required to close prior to the introduction of the modified Stage 2 measures (October 10, 2020) or essential businesses permitted to operate with capacity restrictions.

In order to apply you will need a CRA business number for your business, information about the revenue decline as well as the number of employees in the business.

For more information please visit the government of Ontario website: https://www.ontario.ca/page/businesses-get-help-covid-19-costs?fbclid=IwAR0h9CxnbUfE0CtEvslNYgUh5h59QXJePRqSIVyg1jc0hJOdT4LDUqMrbaA#section-0

To apply: https://www.app.grants.gov.on.ca/msrf/#/

T4 2020 Preparation with CEWS and TWS

Canada Emergency Wage Subsidy (CEWS)/Temporary Wage Subsidy(TWS)/T4 Preparation

As you are aware, there are many benefits that have been available to employers over the past several months. Some of these benefits will affect the way that T4s are prepared in 2020.

Canada Emergency Wage Subsidy (CEWS)
This benefit assisted employers who had a drop in revenue during the year and could apply to CRA to have a percentage of their wages reimbursed to them. This benefit requires a separate application form to CRA and will not affect the way that T4s are prepared.

The deadline to file the reports is nearing if employers have not yet filed the application. For Claim Periods 1-5 (based on March – July 2020 revenue), the deadline is January 31, 2021. Starting with Claim Period 6, the deadline is 180 days after the ending date for the application period. Period 6 covered the time from August 1-29, 2020, so the application deadline will be February 25, 2021.

Temporary Wage Subsidy (10%)
The temporary wage subsidy is a benefit, that from March 18 – June 19, 2020, reimburses you up to 10% of the remuneration you pay up to $1,375 per eligible employee. The maximum total for each employer is $25,000. This subsidy could be reduced from source deductions remitted to the government or it could be carried forward to use on future payments.

In order to reconcile the amount that was reduced for the TWS, CRA is requiring that all employers fill out a PD27 10% Temporary Wage Subsidy Self-identification Form for Employers. This form is required to be filled out by all employers who claimed either CEWS or TWS. If you claimed CEWS, but not TWS, the form needs to be filled out with a claim of 0%.

The PD27 form can be found on CRA’s website and can either be mailed to CRA or uploaded through My Business Account or Represent a Client.

T4 Preparation
While preparing the T4s for 2020, please note that there are four new boxes that need to be filled out for all employees, regardless of whether any COVID subsidies were applied for. Gross income should still be entered in Box 14 as usual, but in addition, the following boxes need to be reported to CRA:

  • Code 57 – Employment income – March 15 – May 9
  • Code 58 – Employment income – May 10 – July 4
  • Code 59 – Employment income – July 5 – August 29
  • Code 60 – Employment income – August 30 – September 26

The amounts reported in these boxes are based on dates paid, not when the money was earned. Therefore, if an employee earned wages from August 23-29 that were paid on September 4, the amount would be reported under Code 60.

 

We hope this information helps and feel free to contact our staff if you have any questions as always.

COVID-19 Financial Relief for Canadians

Since the beginning of March, restrictions and measures related to COVID-19 have rapidly escalated. On March 18, 2020, the Government of Canada announced a series of measures designed to support the finances of individuals, businesses, charities, and non-profit organizations

COVID-19 Financial Relief for Canadians:

Businesses

Individuals

Other Filings and Administration

Future Changes

APPENDIX 1
Federal Government Financial Relief Measures Related to COVID-19

APPENDIX 2
Tax Deadlines & Payments – Summary of Extensions* (as of April 8th, 2020)

COVID-19 Financial Relief for Canadians April 8 2020

New COVID-19 Updates from the CRA

As part of Canada’s COVID-19 Economic Response Plan the CRA has extended a number of income tax filing and payment dates to help Canadians during this difficult time.
Some key highlights include:
• Interest and penalties will not be charged if deferred payments are made by September 1, 2020
• Individual filing date extended until June 1, 2020
• All Corporations with a filing date after March 18, 2020 and June 1, 2020 has been extended to June 1, 2020
• Trusts with a year end date of December 31, 2019 have a filing date extension to May 1, 2020
• Trusts with typical due dates in April or May have been extended until June 1, 2020

For additional information on these and other filing and payment extensions please see the CRA website:

www.canada.ca

Canada’s COVID-19 Economic Response Plan

It was announced that The Government of Canada has made some significant moves in their attempt to help Canadians during this outbreak.

Graham Scott Enns would like to draw your attention to the following document published by Video Tax News regarding some of the changes that have a specific impact on taxpayers.

Areas of interest include:

Individuals

Businesses

Other Filings and Administration

Financial Assistance

Closing & Webpages to Monitor

Key Points Canada’s COVID-19 Economic Response Plan March 18 2020

Filing of T4’s, T5’s and other Tax reporting forms

The T4 tax reporting forms for employees must be filed with the Canada Revenue Agency by the end of February to avoid penalties for late filing.  T5 forms reporting dividends, interest and other applicable income must also be filed by the end of February.