The CRA Tax Filing Deadline Has Been Extended – When Should I File?
Should I File My Income Taxes with the CRA Now or Wait?
The situation with the coronavirus and the spread of COVID-19 has affected nearly everyone on earth.
Unfortunately, the efforts to stop the spread of the virus have had a negative impact on many businesses and many people have lost their jobs either permanently or temporarily. That has made it tough for people to make ends meet and this financial crunch will likely also make it difficult for many to pay their taxes.
For this reason, the Government of Canada has made changes to various deadlines for filing income tax returns with the Canada Revenue Agency (CRA). In many cases, this means extending tax deadlines to make it easier for taxpayers to file and pay on time.
Overview of Changes Made to Income Taxes Due to the Coronavirus
The Canada Revenue Agency has taken several measures to help Canadians manage their tax and benefit affairs as the coronavirus situation evolves.
Tax Changes for Individuals
- The deadline to file individual income tax and benefit returns has been deferred until June 1, 2020. This is a change from the original April 30, 2020 deadline.
- In addition, the deadline to pay any balance due for individual income tax returns has been extended from April 30, 2020 to September 1, 2020. This means that you will not be charged any interest or penalties if your balance is paid by September 1, 2020.
Tax Changes for Self-Employed Taxpayers
- The tax filing deadline for self-employed individuals remains June 15, 2020.
- For self-employed individuals or those who have spouses or common-law partners that are self-employed, the deadline to pay any balance due for your individual income tax and benefit return has been extended from April 30, 2020, to September 1, 2020
Tax Changes for Businesses
- The deadline to file business tax returns remains the same: 6 months after an organization’s fiscal year end.
- The deadline for businesses to pay any income tax amounts that become owing or due after March 18, 2020 and before September 1, 2020 has been extended to September 1, 2020. This means you will not be assessed any penalties or interest if your balance due is paid by September 1, 2020.
For more information on the tax changes that were announced, please visit https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html#individuals
These tax changes have left many people wondering whether it is better to file their taxes now or to wait until the deadline. What you choose to do depends on your situation.
If You Owe Income Taxes
If you believe you will owe income taxes, you can likely wait until the new deadline (June 1) to file and know that you will not have to pay until September 30, 2020. This extended deadline and tax due date will give you more time to save up enough money to pay your tax bill without having to worry about paying interest until September 1, 2020.
Of course, there is nothing stopping a taxpayer from filing earlier if they “want to get it out of the way” or for any other reason.
It’s also important to remember that the numbers in your income tax return are used to calculate various benefits. If you are due to receive government benefits and credits, it’s a good idea to file on time to avoid interruption of these benefits and credits even if you do not owe taxes.
The CRA has taken several new measures to provide financial assistance to taxpayers during this health situation. This includes the new Emergency Care Benefit, a one-time special GST payment for 2019-2020, and an increase to child benefit payments for 2019-2020. By filing on time, you can avoid any delays associated with these benefits.
If You Are Expecting a Refund
If you are expecting a refund, it will likely be in your best interest to file your tax return as soon as possible. The sooner you file, the sooner the CRA will assess your return (within reason), and the sooner you will receive your refund. Typically, it takes about two weeks after filing to receive your refund (if you file electronically and opt for direct deposit), but this could be affected by various delays. To ensure that you get your refund as soon as possible, you should file as early as you can.
Also, as mentioned, filing early will help ensure that you don’t interrupt any benefits or credits you may be due to receive as these are related to filings.