COVID-19 Relief Measures Bonny Koabel CPA, CGA, AKR Consulting
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s a result of COVID-19 the Government has introduced financial measures to compensate businesses. While most companies are aware of the 75% Wage Subsidy and the $2,000 monthly Canadian Emergency Relief Benefit we will take a further look into additional COVID Relief Measures.
In addition Employers with annual payrolls of up to $5 million will be exempt from EHT on the first $1 million of total Ontario T4 Payroll 2020. This increased EHT tax exemption limit will increase company savings from $9,945 to $19,500 in 2020. The EHT exemption limit will return to $490,000 on January 1, 2021.
$40,000 Canadian Emergency Business Account (CEBA) CEBA is available through all major banks and provides interest free loans of $40,000 until December 31, 2021. After introducing the program the Government increased the scope of companies that could be funded. Currently in order to be eligible a Business must have 2019 T4 Salaries of between $20,000 and $1,500,000. Businesses that are able to repay the loan in full by December 31, 2022 will receive an incentive of $10,000 in loan forgiveness.
Workplace Safety and Insurance Board (WSIB) Businesses covered by the WSIB’s workplace insurance are automatically eligible for the following relief package:
Employer Health Tax Deferrals The Provincial Government is providing assistance with Employer Health Taxes. Beginning April 1, 2020 and for a period of five months, up until August 31, 2020, the Province will not apply any penalties or interest on any late-filed returns or incomplete or late tax payments. Therefore EHT payments from April, May, June and July will not be due until August 31, 2020.
• Schedule 1 employers with premiums owed to the WSIB will be allowed to defer reporting and payments until August 31, 2020. • The deferral will also apply to Schedule 2 businesses that pay WSIB for the cost related to their workplace injury and illness claims. In addition, no interest will be accrued on outstanding premium payments and no penalties will be charged during the six-month deferral period. 10% Wage Subsidy All employees and businesses that do not qualify for the 75% Wage Subsidy may qualify for the 10% Wage Subsidy. The 10% Wage Subsidy covers the period of March 18, 2020 to June 19, 2020. Businesses that do not experience a drop in sales of 15% in March or 30% in April, May, and June may qualify for this subsidy for that specific month. Also any Employees who do not qualify for the 75% Wage Subsidy because they began employment with their current Employer after March 18th, 2020 may qualify for the 10% Wage Subsidy. Eligible Businesses In order for a Business to be eligible for the 10% Wage Subsidy they must have a business limit for their last taxation year that ended prior to March 18, 2020, greater than nil. Companies will need to consult your Accountant and see your T2 Corporate Tax Return to confirm the Business Limit amount.
Call us and find out how you can start saving money AKR CONSULTING CANADA INC. 151 Courtneypark Drive West, Suite #100 Mississauga, ON L5W 0A5 T: (905) 678-6368 | F: (905) 677-1700 info@akrconsulting.com www.akrconsulting.com
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BlockTalk - Summer 2020
Eligible Employees The 10% Wage Subsidy applies to all T4 employees that are paid salaries, wages, bonuses, or other remuneration. The Wage Subsidy does not apply to workers from Employment Agencies. If an Employee goes from Employment Agency payroll to Company payroll the Employee will then qualify for the Wage Subsidy. Continued on page 12
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