(Updated May 28, 2020 and May 25, 2020)
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May 28, 2020
CRA updated the Trust Return portion of the deadlines website to note that a September 1, 2020 deadline applies to income tax balances and instalments due on or after March 18 and before September 1, 2020. “Penalties and interest will not be applied if returns are filed and payments are made by September 1, 2020.”
Our May 25, 2020 “Mailing list” email referred to a June 30, 2020 deadline for GST/HST returns filed by self-employed individuals. While the legislated deadline of June 15, 2020 has not been extended, CRA previously announced that no penalties would be assessed “where a return is filed late provided that it is filed by June 30th”. However, the extension of the payment deadline applied only to amounts which became owing “on or after March 27, 2020 and before June, 2020”, presumably because most GST/HST returns are due on a month end date.
CPA Canada has indicated that they are seeking clarification on a variety of uncertainties stemming from the deadline extension, and are hopeful we will see further information. Some uncertainties which have been raised by our networks, and communicated to CPA Canada, include:
A trust or corporation whose filing due date falls on Saturday, May 30 or Sunday, May 31 is technically required to file on Monday, June 1. CRA has not confirmed whether such filings benefit from the September 1 extended deadline.
It is unclear what, if any, extension applies to partnership returns. The earlier extensions to June 1 for most filings did not extend to the T5013 and related schedules, which were instead given an extension to May 1. Partnership returns have not been mentioned specifically in the new extension announcements.
The messaging regarding personal tax returns is that individuals “will not be charged late-filing penalties or interest if your 2019 individual (T1) income tax returns are filed and payments are made prior to September 1, 2020”. It is unclear whether the late filing penalty will apply if a return is filed after the June 1 (or June 15) filing deadline, but not all taxes have been paid by September 1.
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May 25, 2020
Personal tax deadline follow-up
On Friday (see May 22, 2020 post below) we quoted CRA’s announcement that T1 late-filing penalties will not be charged if returns are filed and payments are made by September 1, 2020. Some have asked if this was a typo. It was not. However, it is important to note that the actual deadline has not been changed to September 1, 2020. What is the difference between an actual extension of the deadline and CRA simply stating that they will not assess late-filing penalties? The returns would still be late, however, the primary disincentive (late-filing penalties) would be removed if all conditions are met.
Also, there was a question as to whether self-employed filers (and their spouses) would enjoy a waiver of late filing penalties as well. CRA updated their website today to confirm that the same relief would be provided: “Penalties (including late-filing penalties) and interest will not be applied if returns are filed and payments are made by September 1, 2020.” Note, however, that no further extension to GST/HST return deadlines have been announced, so it appears the annual GST return required by many self-employed individuals still needs to be filed by June 30, 2020. Make sure to check back on the CRA deadline listing page for any changes.
For information on T1135’s and other returns, see “Other information returns, elections, designations and information requests” below.
Corporate tax deadlines
Corporations that would otherwise have a filing deadline in June, July, or August 2020 would have their deadline extended to September 1, 2020. It appears that the previously extended deadline of June 1 for returns due after March 18 and before June 1 is not being extended.
Trusts deadlines (corrected May 25, 2020, see Note 1)
The June 1, 2020 extended filing date applies to trusts that would otherwise have a filing due date on March 31, or in April or May 2020.
The filing date for the current tax year (including the associated T3 information return) for trusts that would otherwise have a filing due date in June, July, or August 2020 is extended to September 1, 2020.
A September 1, 2020 extended date applies to income tax balances and instalments due on or after March 18 and before September 1, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 1, 2020.
Other information returns, elections, designations and information requests
Unless otherwise noted, the following applies to other information returns, elections, designations and information requests that are due.
Penalties and interest will not be applied if information returns, elections, designations, and information requests are filed and payments are made by September 1, 2020.
The waiver of penalties and interest for 2019 T1 individual returns and trust returns described above also applies to form T1135 and any elections, forms and schedules that must be filed with the return, provided that they are filed by September 1, 2020.
For 2019 T2 corporate returns, the extension of the filing deadline applies for all purposes. In particular, the extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the corporate return.
Important sources and Links
Note 1
Trust deadline correction (May 25, 2020):
In the original version, we reported that trusts that otherwise have a filing due date on March 31, or in April or May 2020 would have a September 1, 2020 filing deadline.
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May 22, 2020
On May 22, CRA announced:
“The deadline for most individuals to file their 2019 taxes has been extended to June 1, 2020. The deadline to pay amounts owed has also been extended to September 1, 2020. Penalties and interest will not be charged if payments are made by the extended deadlines of September 1, 2020. This includes the late-filing penalty as long as the return is filed by September 1, 2020.
If you, your spouse, or your common-law partner are self-employed, you still have until June 15, 2020, to file your taxes. However, your payment deadline has also been extended to September 1, 2020.”
VTN Comment
The above message has likely come as a surprise to many who interpreted CRA’s extension as originally announced to mean that there would still be a late-filing penalty if not filed by June 1, 2020. Many thought: “Why have a deadline if there is no late-filing penalty?”
However, CRA’s website indicated that “Penalties and interest will not be charged if payments are made by the extended deadlines of September 1, 2020.”, which could be read to indicate the late filing penalty would not be assessed in these circumstances.
As we digest CRA’s comments, this is our understanding:
The T1 deadline for those who aren’t “self-employed” is still June 1, 2020. However, CRA has just announced that the late filing penalty will not be assessed as long as those returns are filed, and any balance due is paid, by September 1, 2020.
In other words, it is a deadline without the traditional disincentive of a late filing penalty.
When it comes to the self-employed deadline, it appears like CRA is effectively waiving late filing penalties as well as long as they are filed by September 1, 2020, HOWEVER, that is not 100% clear.
For further details, please see the CRA release that we have quoted.
We will be providing updates on these comments at videotax.com/COVID-19 as more information and clarifications are released by CRA.