All You Need to Know About Canada's Tax Deadline Response to Coronavirus
As part of the federal government’s COVID-19 economic response plan, taxpayers will have an extra two months to file their income tax returns, and an even longer respite when it comes to paying taxes owing.
But not everyone will benefit from a delay in filing, so procrastinators should carefully consider what’s best for them. Here’s everything you need to know about the income tax deadline extension, and whether or not you should make use of it.
In This Article:
What Are the New Deadlines?
The new tax filing deadline for most individuals is June 1, 2020; pushed forward from the usual April 30th date. (One exception: returns for trusts that have a taxation year-end of December 31 are due May 1, 2020.) The deadline for self-employed Canadians to file their returns — typically June 15 — has not changed.
If your return indicates that you owe money to the CRA, you will have until September 1, 2020, to pay up before the agency starts charging you daily interest and late penalties. This is a four-month deferral of taxes owing, since the standard payment date is April 30 — even for self-employed filers.
Self-employed workers or others who usually make installment payments on their income taxes (or any amounts in arrears) can also put off such payments until after Aug. 31, 2020. No interest or penalties will accumulate on these amounts during the period.
Why the Change?
The extended filing and payment deadlines are meant to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak. Clearly, those who owe taxes will benefit from having extra time to pay, while others may just enjoy having one less task to worry about during a stressful period.
Are There Any Reasons to File Sooner?
Yes! Given that the majority of the country’s taxpayers receive an income tax refund, most Canadians will not benefit financially by filing their returns at a later date. If you do wait, you won’t get your refund as quickly, and you may also delay receipt of other annual entitlements, such as the GST/HST credit or the Canada Child Benefit — both of which have special COVID-19 top-up amounts this year.
What If I Use a Tax Preparer?
While most Canadians can sail through tax season on their own with the assistance of the right tax software some who have very complex returns prefer to seek assistance from an accountant or other tax preparer. To reduce the necessity for in-person meetings (as we’re all asked to be vigilant with our “social distancing” measures), the CRA will temporarily recognize electronic signatures on the forms that must be signed by individuals to authorize a tax preparer to file their taxes.
Get Tax Prep Help!
TurboTax is a great platform to help you make sure you are prepared and ready to go for the extended tax deadline coming up! Make sure you file everything you need to and get help with TurboTax’s interview style Q&A or even further, live, on screen support. If you’re digitally inclined, TurboTax will have you set in minutes. Click here to learn more.
HR Block helps you get your taxes right, and make sure you claim all the necessary benefits you are entitled to. Their easy to use platform helps you file your taxes online, alone, for free or offers you one of their tax professionals that can better assist. Especially through this tough time, you want to make sure you are maximizing your refund, and H&R Block can help you do just that. Click here to learn more.
So, When Should I file?
If you have the time, ability and/or resources to prepare and file your taxes now, there is no benefit to waiting. Should you have a balance owing, you can still wait until September 1 to pay that tax bill without penalty. And if you have a tax refund coming your way, you will receive it sooner rather than later—which can help you manage if you are suffering financially due to the coronavirus, or be put to many other good uses. Obviously, if you are ill or unable to prepare or file your taxes at this time for any reason, you can take comfort in knowing that you have until June 1 to file.