Davidow & Nelson Blog

Public Listing of Applicants: CANADA EMERGENCY WAGE SUBSIDY

On December 21, 2020, CRA launched the Canada Emergency Wage Subsidy (CEWS) Employer Search, which allows users to search a listing of 340,000 CEWS applicants. The results, which are updated daily, display the legal name, operating/trade name, or business number of corporations (other types of entities are not listed) that have been approved for the… Read more »

Rollover to a Child or Grandchild’s RDSP: RRIF/RRSP ON DEATH

Normally we think about rolling RRIFs and RRSPs to the surviving spouse upon death, however, there are other options. One such option is to roll it on a tax-deferred basis to a child or grandchild’s Registered Disability Savings Plan (RDSP). A June 26, 2020 Technical Interpretation discussed the ability to roll funds from a deceased… Read more »

IRS Starting Compliance Work: U.S. TRANSITION TAX

In general, U.S. shareholders were required to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States. This tax could apply to a U.S. citizen, resident or Green Card holders who own an interest in a private Canadian corporation. This… Read more »

Directors can be Personally Liable: UNREMITTED GST/HST OR SOURCE DEDUCTIONS

Directors can be personally liable for employee source deductions (both the employer and employee’s portion of CPP and EI, and income tax withheld) and GST/HST unless they exercise due diligence to prevent failure of the corporation to remit these amounts on a timely basis. As many businesses are struggling with cashflow, it may be attractive… Read more »

Statute-Barred Periods: UNREPORTED INCOME

In a June 10, 2020 French Court of Quebec case, the taxpayer had been assessed with unreported income of $68,162, $66,192 and $31,540 for 2004, 2005 and 2006, respectively, all beyond the normal reassessment period (generally 3 years). The amounts were computed using the cash flow analysis method, meaning that cash received was considered taxable… Read more »

The Cost Could Be Very High: COMMINGLING OF PERSONAL EXPENSES IN THE BUSINESS

In a July 23, 2020 Tax Court of Canada case, at issue were a number of expenses claimed by the taxpayers (a corporation and its sole individual shareholder) in respect of the business of selling financial products and providing financial planning advice. CRA denied various expenses spanning 2007 and 2008 and assessed many of them… Read more »

Moving, Medical and More!: REASONABLE MEAL ALLOWANCES

On September 3, 2020, CRA announced that, effective January 1, 2020, the rates allowable under the simplified method related to travel for medical expenses, moving expenses, and the northern residents deduction, as well as meal claims for transport employees, increased to $23 from $17 per meal, for a total of $69/day. This is also the… Read more »

TAX TICKLERS… some quick points to consider…

In 2021, four special payments to recipients of the Canada Child Benefit, totaling up to $1,200 per child under age six, will be made. The Canada Emergency Wage Subsidy has been extended to June 2021. Details are still pending for periods after March 2021. CRA has required Coinsquare, a cryptocurrency trading platform, to provide the identity of every client (which is… Read more »

When to Apply? CPP

While the normal age to begin receiving regular CPP is 65, individuals can apply to start receiving earlier at a cost, or later for a greater benefit: If the individual starts before age 65, payments will decrease by 0.6% each month (or by 7.2% per year), up to a maximum reduction of 36% if started… Read more »

TAX TICKLERS… some quick points to consider…

CRA has opined that U.S. Economic Impact payments received by residents of Canada are not taxable in Canada. 1,252,830 Canada Emergency Wage Subsidy (CEWS) applications have been approved for a total value of $41.12 billion (as of October 4, 2020). On October 9, 2020, the Government announced that the CEWS program will be extended to… Read more »