Other bills will be released, which will include stricter rules that will address issues such as whether new owners are in business. The aim will be to ensure that the rules are not used for “artificial tax planning”. On July 30, 2021, the federal government announced the extension of COVID-19 support measures for individuals and businesses. These extensions include: If your taxable income for the 2021 taxation year is more than $79,845, you will have to repay a portion of your OAS. If your taxable income was more than $129,757, you would not have received any OAS payments. Two recently published technical interpretations, 2020-0873601I7 and 2021-0880401I7, address the issue of whether various mandatory closures are eligible for containment assistance. The scenarios presented to the CRA were as follows: 28. In April 2021, a Ways and Means Motion (NWMM) was tabled to implement some of the proposals contained in the 2021 federal budget. It also includes a number of other previously announced measures, such as: The RRSP annual dollar limit for the 2021 taxation year is $27,830. Keep in mind that your RRSP contribution limit is limited to 18% of your previous year`s earned income. This means that the dollar limit is the maximum amount you can contribute, regardless of your income. In 2022, the limit in RSP dollars increased to $29,210. Technical Interpretation 2021-0875571I7(E) addresses whether a boat slide is considered real or immovable property, so the costs of renting the boat licence are eligible for the ESRB.
The CRA makes general comments and notes that the taxpayer should respect the principles of the common law (or the Civil Code of Quebec if the property was located in Quebec) in determining whether a particular property, such as a boat slide, is considered real or immovable property. The CRA updated its Scientific Research and Experimental Development (SR&ED) Requirements Submission Policy in November 2020 to reflect announced legislative changes and the extension of SR&ED reporting deadlines due to the COVID-19 pandemic. Appendix A of the directive contains a table summarizing the extensions of the deadlines for the submission of SR&ED by the CRA. Notably, the table in Section A.1 shows that the expiry periods for T2 returns for corporations whose taxation years end from November 30, 2019 to February 29, 2020 are set at 1. In September 2020, the federal SR and ED reporting deadlines for these taxation years were extended to September 1, 2021. The credit rating agency has reconfirmed that these maturity dates continue to apply. During the CRA roundtable (2021-0879631C6 E) at the Tax Executives Institute (TEI) Semi-Annual Virtual Conference, the CRA was asked a number of questions. In one question, the rating agency was asked whether an eligible entity should calculate its eligible income using the same approaches and choices for the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS). The credit rating agency confirmed that an eligible entity should calculate its revenue reduction for both grants according to the same rules (i.e. the same choices and approaches) that apply to the waiting period. The final legislation shall apply from the later date of the 1st. November 2021 or from the date of publication of the final bill.
The Government has adjusted the tax brackets for 2021 to maintain the purchasing power of Canadians as commodity prices continue to rise. On May 26, 2021, the credit rating agency published guidelines that could help your clients determine if they had been contacted by a legitimate CRA agent. To protect your customers from fraud, it`s important for them to know when and how the CRA might contact them, especially if the review of individuals` tax returns resumes. The 2021 federal budget included several proposals that will change the way the credit rating agency communicates with taxpayers and their representatives. In particular, significant issues and concerns were identified with respect to the proposed Notice of Assessment (NOA). Another voluntary calculation of the basic remuneration for the period from 14 March to 5 June 2021 is proposed to ensure that the core remuneration benchmark remains reasonable. In particular, an eligible employer would be allowed to use the period from 1 March 2019 to 30 June 2019 or from 1 July to 31 December 2019 to calculate the basic remuneration for waiting periods from 14 March to 5 June 2021. The credit rating agency will manage this measure on the basis of the draft legislative proposals published with the announcement.
The topic was discussed during our recent webinar with the CRA on the HPRC. As part of the general approach, an employer compares their current earnings to the same period before the pandemic. Once an approach has been chosen during period 5, the employer must follow that approach for all remaining periods. In our question to the CRA, the employer considered its claim for period 14, in which March 2021 revenue is compared to March 2019 revenue. This was problematic because the employer in question was a new company that was launched in May 2019. In its response, the credit rating agency stated that the use of the CEWS/CSRP in period 14 and subsequent periods would be problematic as the employer cannot switch to the alternative method. However, they also pointed out that the matter had been referred to Finance Canada. As a reminder, the CRA stopped collecting the following annual information statements in Ontario effective May 15, 2021: We asked the CRA to confirm that the additional relief will apply in 2020 and 2021. Note that the government had previously announced that the exemption from auto watch fees will apply to both 2020 and 2021. Finally, the CRA has published Employer`s Guide T4130 2021 – Taxable Benefits and Allowances, which also includes these recent announcements. The benefit for working families: This benefit has been reintroduced for the 2021 tax year.
As noted in our November 15 article, the credit rating agency deferred the notification requirement for reporting information in the first calendar year, in line with the new GST/HST rules for digital sales (the new rules) to help relevant platform operators adapt to the new reporting requirement. As part of its policy to continue to increase it over time until it reaches $15,000 in 2023, the government has increased the basic personal amount for the 2021 taxation year to $13,808. That means every Canadian will receive a slight boost to their performance this year, and it`s likely you can expect another boost next year as well. The U.S. Department of the Treasury and the Internal Revenue Service announced on March 17 that the deadline for the U.S. federal tax return for individuals for the 2020 tax year will automatically be extended from April 15, 2021 to May 17, 2021. The IRS will provide official guidance in the coming days. Access to Child Care and Expense Relief (CARE) Tax Credit: For the 2021 taxation year, this credit will be increased by 20%. If you get a return from last year, you can get back the work-from-home tax credit. The maximum claim amount has also been increased from $400 to $500 for the 2021 taxation year. If you have kept an eye on your expenses, you can claim your total calculated amount. Alternatively, you can use the $2 flat-rate method for every day worked from home during the pandemic.
We will also contact the rating agency about the status of T3 e-filing, as we have assumed that it will be possible to submit most T3 returns electronically by 2021, which should facilitate the submission of these returns and the additional information required. It should be noted that the draft law on these proposals has been published but has not entered into force. Based on the feedback received, many want to start the data collection process well in advance of the 2021 T3 filing deadline, and they asked us if we have an overview of when the credit rating agency will provide details on what is needed. We asked the CRA if it could publish a draft of the new T3 calendar that must be completed or a list of the specific information needed to complete the form. We are waiting for the response of the rating agency. As we mentioned in our March 2021 tax blog, many members will be engaged to help clients meet their accounting, accounting and tax compliance requirements, but they may not perform auditing, reviewing or compiling as part of their work. In these situations, the work performed by the Member affects the Client`s accounts used by the Member to prepare the Company`s tax return (the federal T2). Tax season is fast approaching and new changes have been implemented for the 2021 tax year. With a second year under the impact of the pandemic, there are several changes that may affect your situation, including new credits and deductions that you may be eligible for. Following our June 8, 2021 post, the CRA has now released its guidelines on the impact of extending the federal expansion of scientific research and experimental development (SR&ED) to provincial R&D claims. The guidelines specifically state that the federal extension does not apply to the British Columbia Scientific Research and Experimental Development Tax Credit or the Nova Scotia Research and Development Tax Credit.
As we mentioned in our previous post, the CRA recommends that affected businesses submit their application forms at the federal and provincial levels without considering the federal expansion of COVID-19. We had hoped that more information on this would be published in the latest economic and financial update in 2021, but no new information has been submitted. We have again asked the rating agency to confirm what will be needed for T3 repatriations in 2021. Below, we have outlined important tax changes and service improvements. We also noted changes in income tax regulations, including those that were announced but were not yet in effect at the time of publication of this guide.