The Canada Revenue Agency (CRA) has postponed the tax payment deadline to September 30th. The extension applies to individuals, corporations, and income tax returns on trusts, including instalment payments. The CRA’s decision to delay its tax deadline is likely to be well received, in light of the current economic downturn.
The added period gives Canadians some leeway in paying income taxes, as people and businesses remain impacted by the COVID-19 pandemic. In addition, any penalties for late filing, and interest owed on a 2019 income tax payment, will also be waived until the extended deadline.
Nonetheless, the CRA encouraged the country to file its taxes as early as possible to avoid being cut off. Early filing also allows for reimbursements and bonuses like the Canada Child Benefit. Low-income seniors who receive a guaranteed financial supplement must likewise file their return by 1st October, to avoid a cessation.
The CRA’s announcement states that it is “waiving interest on existing tax debts related to individual, corporate, and trust income tax returns from April 1, 2020, to September 30, 2020 and from April 1, 2020, to June 30, 2020, for goods and services tax/harmonized sales tax (GST/HST) returns.”
Although this measure does not void any penalties and interest already assessed prior to this period, it delays the accumulation of additional interest charges on a taxpayer’s existing tax debt.
The CRA estimates this flexibility for individuals and corporate taxpayers could cost Ottawa about $55 billion dollars, which it plans to recover once the new deadline is met.