The Federal Government’s COVID-19 Economic Response Plan allows businesses to defer until September 1, 2020 the payment of any income tax that becomes owing between March 18, 2020 and August 31, 2020. No interest or penalties will apply to these unpaid tax balances during this time period. This measure is applicable to both monthly instalments and year-end tax balances due under Part 1 of the Federal Income Tax Act.
The deadline for self-employed individuals and their spouse or common-law partners remains unchanged (June 15, 2020), but the payment date for the 2019 tax year has been extended to September 1, 2020.
Deferral of GST/HST Remittances and Customs Duties
As part of the COVID-19 Economic Response Plan, businesses, including self-employed individuals, can defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments or remittances that become owing on or after March 27, 2020, and before June 2020. Thus, no interest will apply so long as payments or remittances are made by June 30, 2020.
Employer Health Tax Exemption
The Ontario Government also announced a five-month relief period for Ontario businesses who are unable to file or remit certain provincial taxes on time due to the extraordinary circumstances caused by the COVID-19 pandemic.
This five-month relief period will begin April 1, 2020 and will end on August 31, 2020.
The most significant change for employers is the temporary increase to the Employer Health Tax (EHT) exemption. The EHT is a payroll tax on the remuneration paid to employees and to former employees. The exemption will be increased from $490,000 to $1 million for 2020. Therefore, businesses that pay less than $1 million in payroll for 2020 will be exempted from the EHT tax.
Changes to the WSIB: Deferral of Insurance Premiums
The Ontario Government enabled $1.9 billion in relief to allow businesses to defer their WSIB insurance premium payments for six (6) months. All employers covered by the WSIB’s workplace insurance are automatically eligible. Eligible workplaces can defer their premium payments until August 31, 2020.