The Canada Revenue Agency (CRA) recognizes that COVID-19 has made it difficult for many taxpayers to meet the regular deadlines for filing income tax returns and related tax filings. In March 2020, the CRA announced initial extensions for income tax filing deadlines after March 17, 2020. At that time, the deadline for tax payments normally due after March 17, 2020 was extended to September 1, 2020.
However, many taxpayers are still having difficulty meeting tax return filing deadlines. Accordingly, in late May, the federal government extended the tax filing deadline for corporate and trust income tax returns that would otherwise have been due between May 31, 2020 and August 31, 2020 to September 1, 2020. They also provided additional relief for individual taxpayers who were unable to file their 2019 personal income tax returns by the June 1, 2020 extended deadline.
Corporate income tax returns
The federal, Quebec, and Alberta governments all extended the deadlines for corporate tax returns and related filings that would have otherwise been due between May 31, 2020 and August 31, 2020. This means that a corporate tax return for a November 30, 2019 year-end, which would have been due on May 31, 2020, was extended to September 1, 2020. Similarly, corporations with December 31 and January 31 year-ends have an extended due date of September 1, 2020. The extension also applies to forms T106, T1135, and any elections, forms and schedules that must be filed with the return.
This makes the tax filing deadline for these returns the same date as the extended payment deadline for Part I corporate income taxes, which were due on or after March 18, 2020.
Trust income tax returns
Similar to corporate tax returns trust income tax returns and associated T3 information returns that are normally due between May 31 and August 31 were extended to September 1, 2020. This extension also applies to forms T106, T1135, and any elections, forms and schedules that must be filed with the return.
Partnership tax returns
Partnerships made up only of corporate partners have a normal filing deadline of five months after the fiscal year-end to file the partnership tax return. This means that such a partnership with a December 31, 2019 fiscal year-end would normally have a May 31, 2020 deadline. For this year only, the filing deadline was extended to September 1, 2020. In addition, any corporate partnership with a normal tax filing deadline that falls between May 31, 2020 and August 31, 2020 has the same extended deadline of September 1, 2020.
Personal income tax filings
Personal income tax returns for 2019 and related filings were due on the extended deadline of June 1, 2020. Self-employed individuals and their spouses’ 2019 tax returns were due June 15, 2020. However, tax payments due with 2019 personal tax returns and June 2020 instalments were extended to September 1, 2020. Despite having extended the payment deadline, it was important to the government that the tax return filing deadline not be extended again. This is because the calculation of benefits need the most current information, which are dependent on the prior year income tax information.
The government stated in late May that individuals who did not file their 2019 income tax returns by June 1 (or June 15) would not be charged late-filing penalties or interest if the 2019 individual income tax returns were filed and payments are made on or before September 1, 2020. The CRA has also extended this administrative relief to information returns, elections, designations, and information requests that would normally be filed with the income tax return, or be due on the same date as the income tax return. This waiver of penalties only applies if the information returns or elections are filed, the income tax return is filed, and all tax payments are made by September 1, 2020.
The Quebec government has adopted similar polices to the federal government with respect to personal income tax filings, payments, penalties, and interest.
Special returns available for non-residents
The CRA also extended the deadline for non-residents of Canada filing certain elective individual income tax returns normally due on June 30 following the year in which the income was received. The filing deadline is normally June 30, 2020 for income received in 2019. The effected returns are for non-resident individuals receiving rental income or timber royalties from Canada, and for non-resident individuals receiving certain pension and related benefits from a Canadian source.
The filing deadline for both types of returns was extended to September 1, 2020 for 2019 returns. The extended payment date is also September 1, 2020 if the returns is are filed by that date.
BDO can help
Even with these extensions, we encourage our clients to work with us to complete their tax filing obligations on a timely basis. If you have a refund, you will want to file quickly to ensure you receive it as soon as possible. If you owe income tax, it is still advisable to prepare your return on a timely basis and then take advantage of any tax payment extensions for cash flow and budgeting purposes.
The information in this publication is current as of June 29, 2020.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.