Spring showers and summer flowers are definitely something to look forward to—but before that, the
one inevitable thing looming in the horizon is your tax deadline. Whether you file your own or get
professional help, 2020 threw a lot of curveballs that could impact your bottom line.
In Canada, if you’re trying to call the CRA hotline to inquire about specific things, you will face an
extraordinary wait time. Of course, that’s to be expected and that’s why the CRA website is full of
important updated information surrounding COVID-19 and changes to taxes and benefits. And if you
don’t have one already, sign up for a MY CRA ACCOUNT where a copy of your T4, and other slips issued
to you, will be posted even though you may be missing your physical copy. These online tools will help
you avoid hours long wait times for some FAQ’s at the ready.
WF checked in with Ami Patel, a partner in the tax practice at PwC Canada, to get some answers to our
tax questions. Here are some things we wanted to know.
WF: Can women expect any specific tax benefits for 2020 as a result of having to shift to a WFH model?
AP: Some employers have initiatives in place for working from home and they may provide an allowance
for workplace essentials. The CRA did announce that reimbursements to employees of up to $500 for
computer or home office equipment will not be considered a taxable benefit to employees if supporting
receipts were provided. Also, the CRA has introduced a new temporary flat rate method to simplify the
deduction for home office expenses for 2020. Employees can claim the deduction for home office
expenses on their personal returns. There are certain eligibility criteria, for example, because you were
required to work from home for more than 50 % of the time for a period of at least 4 consecutive weeks
and any expenses you incurred were used directly into your work for that period. The maximum amount
that can be claimed is $400 per person.
WF: Are there any added or hidden benefits for women who lost day care support services during
various phases of the lockdown while working in essential services or WFH?
AP: The one benefit that is aimed toward care giving is the Canada Recovery Care Giving Benefit, CRCB,
and that gives income support to employed and self employed individuals who are unable to work
because they must care for a child under 12 years old or a family member who needs supervised care.
That means, the household can receive $500, or $450 after the taxes are withheld, for each one-week
period. After that, the individual must apply again through their ‘MY CRA Account.’ You can also apply if
you’re unable to work for at least 50% of their scheduled work week because they must care for a family
member since their school/childcare facility is closed because of COVID-19. . However, you cannot apply
for this benefit if you’ve received another benefit for the same period.
WF: CERB. CRB. What’s the difference?
AP: CERB or Canada Emergency Response Benefit is an old recovery benefit that was discontinued, the
one that was initially in place between March 15 th , 2020 and September 26 th , 2020, and all of those
applications were accepted and processed by CRA until December 2, 2020. That was the initial $2,000
per month amount. Any payments received in 2020 related to CERB must be reported on your tax
return (due April 2021). A T4A slip should be available for the 2020 tax year under the CRA My Account
portal. The CERB has been discontinued so now, the Canada Recovery Benefit (“CRB”) is the new
recovery program that individuals can apply for, for two-week periods, in the amount of $1000 (or $900
after tax). The program can be used by individuals who are not employed/self employed because of
COVID-19, and are not eligible for Employment Insurance, or for individuals who had their employment
reduced by at least 50% because of COVID-19
WF: How can women in small business minimize their tax exposure?
AP: For any owner of a small business that has been impacted by COVID, there are a number of
programs to help manage their business during COVID-19. This includes the Canadian Emergency Wage
Subsidy (“CEWS”) program, which helps employers to re-hire employees and avoid layoffs. The CEWS
program provides businesses with a subsidy amount to help cover part of their employee wages There
are certain eligibility requirements that can be found on the CRA website. Women in business taking
advantage of these programs are also encouraged to pay attention to deadlines.
The other program being offered, Canada Emergency Rent Subsidy (“CERS”), provides eligible
organizations with rent and mortgage support. Businesses may be able to receive up to 75% of eligible
expenses for periods beginning December 20, 2020. It is important to refer to the CRA website to
determine whether you qualify. There are some helpful subsidies if you’re a business owner trying to
keep your operations going in this environment.
As part of the federal budget announced on April 19 ,2021, both CEWS and CERS programs were
extended to September 25, 2021 with gradual decreases over time to the maximum benefit available.
WF: If your business is based in Ontario, what should we be looking out for?
AP: There are some support grants available through the Ontario government. For example, the Ontario
Small Business Grant helps small businesses that have been required to close or to restrict services, and
that grant provides funding of $10,000 – $20,000 to help cover the loss in revenue. The requirement is
the business must have experienced a revenue decline of at least 20% and the business must have fewer
than 100 employees. There’s also another grant related to PPE which can be received, up to $1000, that
was made for purchases for COVID-19 prevention requirements.
WF: Thanks Ami for your insight on this topic. Any last thoughts for our readers?
AP: It’s important to note that most of the grants and credits we discussed are cash received to cover
existing expenses, of which some are taxable and must be included in a business’s corporate tax return.
These programs are not aimed at minimizing your tax exposure, rather they are intended to assist you
during these hard times Also, do visit the CRA website to learn more about the various recovery programs that
are available and any related changes to the existing programs we discussed.