Davidow & Nelson Blog

Excess Contributions: TFSA

Individuals who contribute excess amounts into their TFSA are subject to a penalty tax of 1%/month on the excess amount for each month that the TFSA is overcontributed. However, CRA has the discretion to waive this penalty tax if the excess amount resulted from reasonable error and the excess contribution, plus any income or capital… Read more »

Repayments: CANADA EMERGENCY RESPONSE BENEFIT (CERB)

Self-employed individuals whose net self-employment income was less than $5,000 will not be required to repay CERB, as long as their gross self-employment income was at least $5,000 (in 2019 or the previous 12 months preceding the application) and they met all other eligibility criteria. On May 12, 2021, a remission order that would allow… Read more »

Tax Treatment: COVID-19 MEDICAL EXPENSES

Medical expenses eligible for a personal tax credit are limited to those specifically provided for by the Income Tax Act. While an expense may clearly relate to an individual’s health, it may still not be an eligible medical expense. CRA recently provided comments on a number of medical expenses related to COVID-19. Face masks In a February 25,… Read more »

Limited Distance Covered: TRAVEL ALLOWANCES

In a March 5, 2021 French Technical Interpretation, CRA commented on whether a travel allowance paid to employees on a per kilometre basis, but only up to a limited number of kilometres, could be a non-taxable allowance. For the allowance to be non-taxable, it must be a reasonable allowance for the use of a motor… Read more »

Potential Impact on Business: CRA COLLECTIONS

As some businesses struggle with cash flow, they may be motivated to prioritize suppliers and other creditors ahead of CRA. A recent court case demonstrates CRA’s power to collect tax arrears and the impact of CRA exercising this power on a business. In a June 11, 2021 Court of Queen’s Bench of Alberta case, the… Read more »

More Clarification: CANADA EMERGENCY RENT SUBSIDY (CERS)

CERS provides support to businesses by covering a portion of rent and property ownership costs of qualifying property. The government has recently extended access to this program until October 23, 2021. The CERS program has the following two components: – the base CERS which subsidizes eligible expenses based on the applicant’s revenue decline compared to… Read more »

TAX TICKLERS… some quick points to consider…

Access to the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and Canada Recovery Benefits has been extended to October 23, 2021. A recent poll of millennials (aged 25 to 40) found that the top reasons for creating an estate plan were: having a child (38%), the pandemic (17%), general life planning (13%), buying a home (6%), death in… Read more »

More People Are Now Eligible: GUARANTEED INCOME SUPPLEMENT

As many individuals had lower income in the 2020 year, some may be surprised that they are eligible to receive the Guaranteed Income Supplement (GIS). In addition, changes in July 2020 allow individuals to earn more without eroding benefits. For those who have been eligible for some time, GIS (and OAS) can be applied for retroactively (up to eleven months back). Individuals over the… Read more »

Financial Hardship: TAXPAYER RELIEF

In a January 14, 2021 Federal Court case, the taxpayer sought a judicial review of CRA’s denial to provide interest and penalty relief on a tax debt of nearly $400,000. The taxpayer argued that relief should be granted due to financial hardship and inability to pay. While the taxpayer provided information demonstrating that monthly expenses… Read more »

Period Extensions: COVID-19 BENEFITS FOR INDIVIDUALS

The eligibility periods for several personal income replacement COVID-19 benefits have been extended: the previous limit of 26 weeks for the Canada Recovery Benefit (CRB) and Canada Recovery Caregiver Benefit (CRCB) will be extended by 12 weeks to 38 weeks; the previous limit of two weeks for the Canada Recovery Sickness Benefit (CRSB) will be extended to four weeks; and the… Read more »