The CRA is extending the CEBA.

The Canada Emergency Business Account (CEBA) program has been a lifeline for countless Canadian businesses since its inception in response to the economic challenges brought on by the COVID-19 pandemic. As the situation continues to evolve, the Canada Revenue Agency, has extended its support to businesses by introducing an extension to the CEBA loan program. 

Find out what it means for businesses, and how to apply.

The CEBA Loan Extension Details:

The CEBA loan extension represents the government's commitment to supporting Canadian businesses during ongoing economic challenges. With the economy still in recovery mode, many businesses are facing ongoing financial pressures. To address this, the CRA announced an extension to the CEBA program on September 14th of this year.

The repayment deadline for CEBA loans to qualify for partial loan forgiveness of up to 33 per cent is being extended from December 31, 2023, to January 18, 2024, recognizing that the end of December is a busy time for many Canadian businesses. This builds on the government's previous one-year extension announced in January 2022.

For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by January 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024.

• Increased Loan Amount: The CEBA loan amount has been increased for eligible businesses. With the extension, businesses may be eligible for an additional $20,000 in financing, bringing the total loan amount to $60,000.
• Forgivable Portion: As with the initial CEBA loans, up to 33% of the additional $20,000 (or $6,000) may be forgivable if certain conditions are met. This is excellent news for businesses as it provides an opportunity to reduce the overall debt burden.
• Extended Application Deadline: The application deadline for the CEBA loan extension has also been extended to accommodate more businesses. Eligible applicants now have until a specific date to apply, providing ample time for businesses to gather the necessary documentation and apply for the loan.
• Interest-Free Repayment Period: Businesses that repay the remaining balance of the loan by a specific date will not incur any interest charges. This makes the CEBA loan extension even more attractive for businesses looking to manage their finances effectively.

Who is Eligible for the CEBA Loan Extension?

To qualify for the CEBA loan extension, businesses must meet specific eligibility criteria, including:

• Having received the initial CEBA loan.
• Demonstrating that their business has been adversely affected by the COVID-19 pandemic.
• Meeting specific payroll or non-deferrable expenses requirements.

It's crucial for businesses to review the CRA's official guidelines and eligibility criteria to ensure they meet all the necessary qualifications before applying for the CEBA loan extension.

How to Apply for the CEBA Loan Extension

Applying for the CEBA loan extension involves a straightforward process through the financial institution that provided the initial CEBA loan. Businesses can visit the website of their financial institution for detailed information on how to apply, including the required documents and deadlines.

The CEBA loan extension is a welcome development for Canadian businesses struggling to recover from the economic impacts of the COVID-19 pandemic. With increased loan amounts, forgivable portions, and an extended application deadline, this extension provides much-needed financial support during these challenging times.

Canadian businesses should take advantage of the CEBA loan extension if they meet the eligibility criteria, as it offers a valuable opportunity to secure additional financing and aid in their recovery efforts.

For more details on this extension, visit this Canada Revenue Agency link.

For more help with this or other tax related questions,  
give me a call at 780-995-5236.

What is the Underused Housing Tax?

The Underused Housing Tax (UHT) is an annual federal 1% tax on the ownership of vacant or underused housing in Canada. The tax generally applies to non-residents of Canada that are owners of housing in Canada. However, in some situations, this tax also applies to some Canadian owners (such as certain partners, trustees, and corporations).

Deadline is April 30 every year however, the government has extended it to October 31 for this year only.

Penalties and interest 

If you fail to file the return on time, you'll incur penalties.

Individual $5,000 
Corporation $10,000

About the UHT

Introduced in 2022, the Canadian Underused Housing Tax Act is a vital piece of legislation aimed at encouraging property owners to make more efficient use of their residential properties. Its primary goals are to combat housing shortages and improve housing affordability by reducing the number of vacant or underutilized homes.

Here are some key elements of the Act:

• Annual Declarations: Property owners are required to declare the status of their residential properties each year. This declaration helps determine if the property is vacant, underused, or their primary residence.
• Vacant Property Tax: Owners of vacant homes for a significant portion of the year may be subject to a vacant property tax. Specific criteria and tax rates vary by province.
• Underused Property Tax: If a property is deemed underused, meaning it is not fully utilized for its intended purpose, the owner may also face an underused property tax.

Preparing for October 31st

To ensure compliance with the Canadian Underused Housing Tax Act and meet the October 31st deadline, property owners can take several proactive steps:

• Review the Act: Familiarize yourself with the Act's provisions to understand your obligations and potential tax liabilities.
• Gather Documentation: Gather all necessary documents and information to accurately complete your declaration, such as property usage records, lease agreements, and occupancy details.
• Seek Professional Advice: If you're uncertain about your property's status or the tax implications, consider consulting a tax professional or legal advisor.
• Submit Your Declaration: Ensure that you submit your annual declaration on time through the designated government portal or channels.

As the October 31st deadline for compliance with the Canadian Underused Housing Tax Act approaches, property owners in Canada should prioritize understanding and meeting their obligations under this legislation. By doing so, they not only avoid potential penalties but also contribute to the larger goal of addressing the housing crisis and improving housing affordability in the country. Stay informed, be proactive, and meet the deadline to ensure a smooth and legally compliant property ownership experience.

For complete details, visit the Canada Revenue's website here. 

For more help with this or other tax related questions, 
give me a call at 780-995-5236. 
 

Why pay more taxes than you need to?

As a business owner in Canada, understanding the nuances of the tax system is crucial to effectively managing your financial resources. By employing strategic tax-saving techniques, you can minimize your tax liability and free up funds for growth, innovation, and investments. 

1. Know Your Tax Deductions:
A solid grasp of eligible business expenses is fundamental to lowering your taxable income. Common deductible expenses include rent, utilities, employee salaries, office supplies, advertising, and professional fees. Keeping meticulous records of these expenses throughout the year can substantially reduce your tax burden.

2. Take Advantage of Capital Cost Allowance (CCA):
The Capital Cost Allowance is a tax deduction that allows businesses to recover the cost of capital assets, such as machinery, equipment, and vehicles, over a period of time. By properly classifying and calculating CCA, you can spread out the tax impact of these significant purchases and save money in the long run.

3. Consider Incorporation:
Incorporating your business can provide various tax advantages. For instance, Canadian Controlled Private Corporations (CCPCs) can benefit from the small business tax rate, which is lower than the personal tax rate. Additionally, corporations can access certain tax credits and deductions that aren't available to sole proprietors.

4. Leverage Tax Credits:
Canada offers a range of tax credits designed to stimulate economic growth and innovation. Research and Development (R&D) tax credits, for example, reward businesses for investing in innovation. By conducting qualifying R&D activities, you can reduce your tax liability while advancing your business's technological capabilities.

5. Split Income Strategically:
Income splitting involves distributing income among family members in lower tax brackets. While recent tax changes have restricted this practice, there are still opportunities to split income in certain cases, such as hiring family members for legitimate roles within the business.

6. Hire Apprentices and Co-op Students:
The Apprenticeship Job Creation Tax Credit and the Co-operative Education Tax Credit encourage businesses to hire apprentices and co-op students. Not only do these programs support the development of a skilled workforce, but they also provide businesses with tax incentives.

7. Maximize Pension Contributions:
Contributions to retirement savings plans, such as Registered Retirement Savings Plans (RRSPs) and Registered Pension Plans (RPPs), are tax-deductible. By making the most of these contribution limits, you can reduce your taxable income and secure your financial future.

8. Explore International Tax Treaties:
If your business conducts international transactions, be sure to understand the tax treaties Canada has with other countries. These treaties can prevent double taxation and provide opportunities for optimizing your tax liability across borders.

9. Keep Abreast of Tax Law Changes:
Tax regulations are subject to change, and staying informed about updates can help you adapt your strategies accordingly. Consult with tax professionals, attend seminars, and follow reputable tax publications to ensure you're up-to-date with the latest developments.

10. Seek Professional Guidance:
Navigating the intricate landscape of business taxation in Canada can be complex. Enlisting the services of a qualified tax advisor or accountant can provide personalized insights and recommendations tailored to your business's unique circumstances.

Reducing your business taxes requires a combination of strategic planning, understanding tax laws, and making informed financial decisions. By maximizing deductions, taking advantage of available credits, and staying informed, you can minimize your tax burden while positioning your business for long-term success and growth. Always remember that tax strategies should align with your business goals and adhere to legal and ethical guidelines.

For more help with these tax tips, give me a call at 780-995-5236 to discuss your financial strategies.