Canadian tax news and COVID-19 updates

Your source for the latest Canadian tax news and updates on changing tax laws. Working collaboratively with the Canada Revenue Agency (CRA) we aim to bring clarity on pressing tax questions and COVID-19 tax updates.

Update on April 30 filing deadline for personal tax returns

As April 30 draws nearer, the federal government has not announced an extension or other general relief. As we discussed previously on this page, we have communicated the need for such action in a number of ways to the federal government and at different levels for several months. Others, including the federal opposition and the Quebec government, also asked the Government of Canada for an extension or an advance waiver of penalties and interest. The issue also has been addressed in the media, in emails from members to their MPs, and in an online petition. We will continue to communicate with the CRA, including discussions on providing efficient and timely relief in the event that penalties are charged.
For self-employed individuals and their partners, the filing deadline remains June 15 and amounts owing are due April 30.
As stated on its website, the CRA intends to charge taxpayers a late-filing penalty if they file their 2020 tax return after April 30, 2021 and there is unpaid tax at that time. The penalty is five per cent of the balance owing for 2020, plus one per cent of the balance owing for each full month the return was filed after April 30, 2021, to a maximum of 12 months. A higher penalty applies if a return was late-filed in the prior three years. Interest will also be charged on unpaid amounts subject to the one-year relief program available to certain taxpayers. As the website for that program states, this relief does not apply to late-filing penalties. We understand that the penalty and interest assessment process is automated for the most part.
Relief can be provided under the taxpayer relief program. However, as individual applications are required, we have started to communicate with the CRA specifically on finding alternatives to reverse penalties and interest that are charged, and to do so as quickly as possible while minimizing the work that needs to be done by taxpayers and their advisors.
While we are disappointed with the federal government’s decision, we are committed to continuing to work with the CRA and Finance Canada in relaying ongoing concerns and providing relevant and timely updates as new information becomes available.
Read more about this topic at : cpacanada.ca