Tax season is different this year.
For one, we’re at the end of May, and it’s still tax season. While most Canadians are used to being done with their taxes by the end of April, this year the government has postponed a number of tax deadlines amid the novel coronavirus pandemic.
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To help Canadians who are struggling financially and constrained by social distancing guidelines, Ottawa has also relaxed other rules to lessen the potential negative financial impacts of filing your taxes late.
If you’re among the millions of Canadians who haven’t sent in their 2019 tax return yet, here’s what you should know:
Deadlines
The deadline for filing your individual tax return, which normally falls on April 30, is now June 1. However, if you’re self-employed, your filing deadline is still June 15, as usual.
The deadline for sending in your return often overlaps with that for paying any taxes you owe — but not this year. This tax season Canadians — whether employees and self-employed — have until Sept. 1 to pay up any 2019 tax debts without facing interest or penalties.
Normally, the Canada Revenue Agency charges compound daily interest on any unpaid taxes starting the day after the due date. There’s also a late-filing penalty for filing late if you have an amount owing. The penalty is five per cent of your tax balance plus an additional one per cent for every full month your return is late, up to a maximum of 12 months.
This year, the CRA will start applying interest and penalties after Sept. 1.
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It may be tempting to postpone doing your taxes if you expect to have a large tax balance. But owing more than you can afford to pay in full is all the more reason to file by the deadline, says Lisa Gittens of H&R Block Canada.
The sooner you file, the longer you’ll have to start paying up your taxes, reducing the amount that would be subject to interest after Sept. 1, Gittens noted.
Gittens advises clients who owe more than they can pay to contact the CRA about setting up a payment arrangement.
“Revenue Canada is terrific at working them out,” she said. “I haven’t had any clients be disappointed or be turned away from applying for it.”
Benefit payments
Here’s another good reason for sending in your taxes on time: filing late can delay benefit payments to which you’re entitled. While the government will eventually pay you retroactively once it has your tax information, this sort of benefit interruption is the last thing you need if you’re already facing a cash crunch.
Still, the good news this year is Ottawa said it will keep paying a number of federal benefits to eligible Canadians until the fall, even if it hasn’t received their 2019 tax or their return hasn’t been processed yet.
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On May 15, Minister of National Revenue Diane Lebouthillier announced that benefit payments will continue until the end of September for eligible Canadians who are currently receiving the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit and the Canada Child Benefit (CCB) even if they have not been able to file their 2019 taxes by June 1.
The government had also previously said eligible seniors have until Oct. 1 to file their taxes without seeing an interruption in their Guaranteed Income Supplement and Allowance payments.
Doing your taxes
If you’re used to doing your own taxes online, the COVID-19 crisis has likely changed little for you.
But what if you normally rely on a pro to prepare your paperwork?
Tax preparers across the country are relying on phones, online file-sharing software, and physical drop boxes to help out clients while practising social distancing.
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At H&R Block, Canadians who aren’t fond of DIYing their taxes can upload all their documents online and have a tax specialist remotely complete and file their return, Gittens said.
Those who are fond of having a paper return can drop off their files at their nearest H&R Block location and complete a phone interview with a tax preparer, she said. They can then choose to pick up their return when it’s ready or have it shipped to them, she added.
And low-income Canadians will still be able to access tax help at no cost this year, the CRA recently announced. Free tax clinics, staffed by community volunteers trained by the CRA, will provide tax support remotely, including via video call.
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