SECTIONS:
A. Information – All Clients Must Provide
B. Questions to Answer
C. Additional Information – New Clients Must Provide
D. Other

2021 saw the continuation of the COVID-19 pandemic, along with the related government supports and tax issues. For example, some may have changed how they carried on their employment duties or business operations, including working from home or using their vehicle for employment or business reasons. We have outlined the key tax issues in the checklist below. Please let us know if you have received other support or incurred other costs related to your income-earning activities due to the COVID-19 pandemic.

Some quick points to consider…

• The annual TFSA limit for 2022 remains at $6,000. As such, if an individual has never contributed and has built room since the program’s inception in 2009, up to $81,500 can be contributed.
• Employees working from home in 2021 due to the COVID-19 pandemic will again have the option to claim a deduction against their employment income using the temporary flat rate method. The maximum claim will increase to $500 from $400 in 2020.

Province’s plan includes $10,000 grant for eligible small businesses and additional electricity-rate relief

The Ontario government is providing targeted relief for businesses and people impacted by the current public health measures aimed at blunting the spread of the Omicron variant. As part of this plan, the government is introducing a $10,000 grant for eligible businesses that are subject to closures under the modified Step Two of the Roadmap to Reopen and is providing additional electricity-rate relief for businesses, as well as workers and families spending more time at home.

• CRA recently sent out processing review letters in error to some taxpayers rather than their authorized representative. If you received a letter from CRA that appears unusual, please contact us.
• A Court recently denied an individual’s travel expenses as no log was maintained in respect of the travel. The Court did not accept an estimate of business travel based on the locations where contracts were signed.
• A recent report found that more than 80% of Canadian parents do not understand the benefits of Registered Education Savings Plans (RESPs). That said, nearly half of adult Canadians currently contribute or have contributed to an RESP.

• 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 the family (6%), marriage or divorce (6%), travelling (4%), and chronic illness/medical issue (3%).
• The U.S. has recently stated that it intends to spend $80 billion over ten years to address “sophisticated tax planning.”
• As of July 1, 2021, GST/HST applies to all platform-based short-term accommodations in Canada (such as those on Airbnb and VRBO).

1.A. Personal Measures

COVID-19 Benefit Amounts – Tax Treatment

Budget 2021 proposes to allow individuals the option to claim a deduction in respect of the repayment of a COVID 19 benefit amount for the year when the benefit was received, rather than the year in which the repayment was made. This option would be available for benefit amounts repaid at any time before 2023.

For these purposes, COVID-19 benefits would include:

• Canada Emergency Response Benefits (CERB) / Employment Insurance Emergency Response Benefits;
• Canada Emergency Student Benefits (CESB);
• Canada Recovery Benefits (CRB);
• Canada Recovery Sickness Benefits (CRSB); and
• Canada Recovery Caregiving Benefits (CRCB).

Individuals may only deduct benefit amounts once they have been repaid. An individual who makes a repayment, but who has already filed their income tax return for the year in which the benefit was received, would be able to request an adjustment to the return for that year.

SECTIONS:
A. Information – All Clients Must Provide
B. Additional Information – New Clients Must Provide
C. Questions to Answer
D. Other

2020 was an extraordinary year like no other. Due to the significant changes from the COVID-19 pandemic, there are numerous tax issues to be aware of this year. For example, many individuals received support in a variety of forms from various levels of government. Others may have changed how they carried on their employment duties or business operations, including working from home or using their vehicle for employment or business reasons. We have outlined the key issues in the checklist below. Please let us know if you have received other support or incurred other costs related to your income earning activities due to the COVID-19 pandemic.

• 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 over 200,000 accounts) to help address perceived risks of non-compliance.
• For the first 9 months in 2020, 6,045 individuals renounced their U.S. citizenship representing a significant increase as compared to only 1,811 for the same period in 2019. 2020 surpassed the highest previous year on record of 5,411 in 2016.

Applications are now open for the Ontario Small Business Support Grant. As you may know, this program will help small businesses that that have been required to close or significantly restrict activities due to this lock down. The grants will be for a minimum of $10,000 to a maximum of $20,000. Businesses will be permitted to use this grant in any way that makes the most sense to them.

You can apply for this and other programs such as Property Tax and Energy Costs Rebates here: https://www.app.grants.gov.on.ca/msrf/#/

I am encouraged by the new Ontario Small Business Grant and hope that it will provide some meaningful support for our small businesses during this shutdown period.

Read more about the Ontario Small Business Support Grant here: https://news.ontario.ca/en/release/59968/applications-now-open-for-ontarios-small-business-support-grant

December 31, 2020 is fast approaching… see below for a list of tax planning considerations. Please contact us for further details or to discuss whether these may apply to your tax situation.