Canadian Self-Employed Filing Deadline for 2021 Tax Filing Wednesday, June 15, 2022 is the self-employed filing deadline for the income tax and benefit returns from 2021. What taxes do self-employed individuals pay in their income tax return? Personal Income Tax Canada Pension Plan Contributions Employment Insurance Premiums This is only required if you are eligible and have registered to participate. Even though the filing is due on June 15, payments were already due on April 30, 2022. Because this was on a Saturday, the extended deadline was Monday, May 2, 2022. Late payments will incur additional interest charges. COVID-19 Benefits That Should Be Included in Your Return For individuals that received federal, provincial or territorial government COVID-19 assistance, they must include the amounts in the business income section of the return. These amounts should relate to the last day of the claim period and can reduce your expenses by the amounts received. You should include the amounts for the following benefits: Canada Emergency Wage Subsidy (CEWS) Canada Emergency Rent Subsidy (CERS) Tourism and Hospitality Recovery Program (THRP) Hardest-Hit Business Recovery Program (HHBRP) Canada Recovery Hiring Program (CRHP) Local Lockdown Program When it comes to government loans from the Canada Emergency Business Account (CEBA) program, the loan itself is not taxable but is to be included as part of business income. As for the forgivable portion, it is taxable in the year that the loan was received. Updates on Income Taxes for Farmers There is a new refundable tax credit that began in 2021 for farmers called the Return of Fuel Charge Proceeds to Farmers Tax Credit. This means that a portion of the fuel charge proceeds from the federal carbon pollution pricing system will go to farming business in provinces such as Alberta, Manitoba, Ontario and Saskatchewan because they do not have their own provincial systems. The amount is proportional to eligible farming expenses in these provinces and if you have over $25,000 in farming expenses, the expected credit is $1.47 per $1,000 of eligible farming expenses. This will increase in 2022 to $1.73. For more information on filing taxes as a self-employed person, please refer to the following links leading to CRA’s website: Return of Fuel Charge Proceeds to Farmers Tax Credit Self-Employed Filing Deadline Information
Category Archives: Business
GST Filing has changed in Canada as of July 1, 2021. This change meant that digital economy business including platform operators may have potential GST filing obligations. There are 3 main types of businesses affected which may need to register, charge and collect GST as well as ensure customers are paying GST on the specified digital platforms for your supplies. GST Filing for Cross-Border Digital Products and Services If you are a non-resident vendor or distribution platform vendor that sells taxable digital products or services to Canadian consumers and entities, you may have GST filing obligations. This includes online music streaming or even more traditional services. Included in this are distribution platform operators which are described below. Distribution Platform Operators Distribution platform operators refers to a supply of property or service that is made through a specified distribution platform and: Controls or sets the main elements of the transaction between the supplier and the recipient. If that does not apply, then is involved directly or through third-parties in collecting, receiving or charging the consideration for the supply and transmitting it to the supplier. Is a prescribed person to operate the platform. Find out more about Distribution Platform Operators by clicking here. GST Filing for Suppliers of Qualifying Goods in Canada This refers to non-resident vendors or distribution platform operator vendors who make the supply of qualifying goods or qualifying tangible personal property supply. These goods are delivered or made available in Canada through methods such as fulfillment warehouses or by shipping goods to purchasers in Canada. GST Filing for Platform-Based Short Term Accomodation These suppliers bring the taxable supplies of short-term accomodation in Canada or are accomodation platform operators that facilitate these accomodations through their own platforms. Accomodation Platform Operators An accomodation platform operator refers to one that supplies short-term accomodations that are made through an accomodation platform. This refers to a person who meets the following criteria in the list to the right. For more information, view this link to definitions on the digital economy. They control or set the essential elements of the transaction between the supplier and recipient. If that doesn’t apply, they are involved directly or through third-parties to collect, receive or charge the consideration for the supply and transmission to the supplier. Other GST Filing Information You have to register for a GST account if you make taxable sales, leases or other supplies in Canada unless your only taxable supplies are of real property sold other than in the course of business and are not a small supplier. Find out more details on the Canadian government’s website at this link.
Training Tax Credit and How You Can Benefit Since 2019, the Canadian federal government has implemented a refundable tax credit called the Training Tax Credit to be used on eligible tuition and fees paid for courses taken in 2020 and subsequent tax years. This tax credit considers each individuals training credit limit for the taxation year and half of the eligible tuition and fees paid to an eligible educational institution. Continue reading to find out more details. How Much Can You Claim? Each individual can accumulate up to $250 per year and sums up to a maximum of $5,000 per lifetime. The credit considers the limit for the year minus any of the credit claimed in the previous year, plus the accumulation of the anual credit of $250. Basically, the amount of the Canada Training Credit will be the lesser amount of either half of the eligible tuition and fees paid or the individual’s training credit limit for the taxation year. Eligibility for the Canada Training Credit Eligible Instutions: An eligible institution is either a university, college or other educational institution that provides post-secondary courses or an institution in Canada that provides occupational-skills courses and is certified by the Minster of Employment & Social Development. Tuition Fee Eligibility: Tuition Fees Ancillary Fees and Charges This refers to admission fees, exemption fees and charges for a certificate, diploma or degree. Examination Fees Individual Eligibility: To start, individuals must be at least 25 years old and less than 65 years of age by the end of the year to accumulate the 0 annually towards their Canada training limit credit and meet the following criteria. Filed a tax return for the year. Be a Canadian resident for the year. Have a total of $10,000 or more income. Allowable income includes: Maternity and Parental Benefits Working Income This refers to income from an office or employment, business income, the taxable portion of scholarship income or research grants, the tax exempt earnings of status Indians and emergency service volunteers as well as income under the Wage Earner Protection Program Act. Have an individual net income for the year that is not over the top of the third bracket of the year. To find out more about your Canada Training Credit limit, check your Notice of Assessment or access CRA’s My Account portal. Read more on the CRA section of the Canadian government’s website here: Canada’s Training Tax Credit
Canada Recovery Hiring Program (CRHP) Due to COVID-19, the Canadian government provided a program to support businesses that have and continue to be impacted by the pandemic. The Canada Recovery Hiring Program, or CRHP, allows for employers to apply for subsidies to cover part of their wages as their hours or wages increase but also to accomodate for the hiring of new employees. The program ended on May 7, 2022 but applications are accepted until 180 days after this date which means that November 3, 2022 is the last day to apply for the last period. During each claim period, employers can either claim the higher of the following options, either the higher of the CRHP subsidy or the wage portion of the Tourism and Hospitality Recovery Program (THRP) or the Hardest-Hit Business Recovery Program (HHBRP). For specific calculators on the subsidy or for more information on eligibility, check out the following link: CRA Recovery Hiring Program How Much is the Subsidy? For the periods between June 6 and July 3, 2021, employers are eligible to claim if they’ve lost any revenue in comparison to their reference period. For the period of July 4 to July 31, 2021 and all subsequent periods until May 7, 2022, the employer must have lost more then 10% of their revenue. Keep in mind that you have 180 days from the end of the period to apply for this program and the last possible date of application is November 3, 2022. The subsidy will pay up to 50% of the remuneration that exceeds the remuneration that was paid during the reference period. Calculate the difference between the CRHP period and the reference period, then multiply that amount by 50 percent to get the maximum subsidy amount. This amount declines to 20 percent by the final period ending on May 7, 2022 and there is a limit on the amount of subsidy you can receive per employee’s weekly wages but not for the entire program amount. What do the CRHP Periods Look Like? Some of the example periods are as follows: Period 21: Sep 26 to Oct 23, 2021 Period 22: Oct 24 to Nov 20, 2021 Period 23: Nov 21 to Dec 18, 2021 Period 24: Dec 19, 2021 to Jan 15, 2022 Period 25: Jan 16 to Feb 12, 2022 Period 26: Feb 13 to Mar 12, 2022 Period 27: Mar 13 to Apr 9, 2022 Period 28: Apr 10 to May 7, 2022 Keep in mind that the program lasts from June 6, 2021 to May 7, 2022. If you would like more details on the program, check out the page on the Canada Recovery Hiring Program on the Canadian Federation of Independent Business website by clicking here.
What is the Climate Action Incentive? Due to Canada’s stance on climate change, they introduced the CAIP or Climate Action Incentive Payments to assist individuals and families offset the cost of federal pollution pricing. Certain provinces have voluntarily adopted this system and so their governments receive the proceeds directly. Other provinces such as Ontario, Manitoba, Saskatchewan and Alberta provide a payment directly to their residents which consists of around 90 percent of the proceeds. The rest is used on small businesses, farmers and Indigenous groups. This is because these jurisdictions do not have their own systems that are meeting the federal benchmark. What is Changing with the Federal Climate Action Incentives? Formerly, the Canadian government provided a refundable tax credit in consideration of their Climate Action Incentive. Recently, the Government of Canada has opted to change this payment into quarterly tax free payments instead, as long as the resident completes their tax filing. These payments will start in July 2022 with a “double-up” payment that returns proceeds from the first two quarters of the 2022-23 fuel charge year. The relevant time period is as follows: April to June 2022 July to September 2022 Once the double-up payments have been sent, the payments will change to single quarterly ones and will come in October 2022 and January 2023. Residents of small and rural communitites may be eligible for the extra 10 percent amount but will need to fill out this form and file it with their tax return. Regardless, the federal Government of Canada does not keep any of the proceeds from pollution pricing and returns them to the provinces or territories of origin. Who is Eligible for the CAIP (Climate Action Incentive Payment)? Firstly you must reside in Alberta, Saskatchewan, Manitoba or Ontario during the first day of the payment month as well as the last day of the previous month and are: 19 years of age or older Have or had a spouse or common-law partner Or were a parent and live or lived with your child Child Eligibility At the beginning of the payment month, your child must be: Your child is under 19 years of age Your child lives with you You are primarily responsible for the care and upbringing of your child Your child is registered for the CCB (Canada Child Benefit) How Do You Apply for the CAIP? You don’t need to apply for the Climate Action Incentive Payment. Instead, the CRA will send you payments for them once you file your income tax and benefit return. Only one partner may receive the credit for the family and it is based on whichever tax return is assessed first. The expected amounts are as follows and depend on your province of residence: First Adult From $373 to $550 Second Adult From $186 to $275 First Child From $93 to $138 Second Child From $93 to $138 If you would like more information on the Climate Action Incentive Payments, check the Canadian government website and visit the following links: Climate Action Incentive payment amounts for 2022-23 Climate action incentive payment