As we enter into the new year, we wanted to take a moment to celebrate and thank all the hard-working, extra-cool accountants out there! Cheers to being a part of this incredible profession. Enjoy "The Extra-Cool Accountant Song" produced and performed by the talented local singer/songwriter Sonia Deleo.
Update to International Guidance
In late December, the following paragraphs were added to CRA’s international guidance in respect of VII. Supplemental guidance, C. Cross-border employment income, (ii) Canadian Resident Employees:
2021 tax year
The CRA is extending to the 2021 tax year the same administrative relief applicable for affected individuals’ 2020 tax year. In other words, for affected individuals whose employers have continued to impose withholdings in 2021 as if the income was earned in the United States, the CRA will again provide an administrative concession and will consider the employment income from the United States employer to be sourced from the United States for 2021.
Additionally, for affected individuals who file their 2021 Canadian income tax return in accordance with the income sourcing rules in the Canada-United States income tax treaty, the same relief that was made available in respect of their 2020 tax year (e.g. treatment of FICA taxes and contributions to United States retirement plans) will be available for 2021. For affected individuals who file in accordance with the Canada-United States income tax treaty, the CRA will again consider granting relief of any interest and penalties imposed in respect of the payment of the individual’s 2021 income tax or in respect of instalment payments imposed on the individual.
Error in Wage Subsidy Spreadsheet
In late December, CRA provided the following advisory about an error which had occurred in their spreadsheet for the wage and hiring subsidy:
A previous version of the spreadsheet for wage and hiring may have shown you were not eligible for the THRP, when in fact you may be eligible.
Who this error may affect
You may have been affected if:
You were applying for period 22 (October 24 to November 20, 2021)
You used a version of the spreadsheet for wage and hiring (version 2021-1) that was available between Tuesday, December 21, 2021 at 6:00 am ET and Friday, December 24, 2021 at 12:00 pm ET
You indicated you are a qualifying tourism or hospitality entity and had both a current-month revenue drop and 12-month average revenue drop over 40%
Step 5 in the spreadsheet showed a zero dollar amount and gave the message that you were not eligible for the THRP
This error was only present in the calculation spreadsheet for wage and hiring support.
What to do if you think you have been affected by this error
If you did not apply for period 22:
Download the latest version of the spreadsheet and do your calculation again for period 22 to check if you are eligible to apply for the THRP - Wage
If you already applied for the HHBRP – Wage or CRHP for period 22:
Contact the Business Enquiries line at 1-800-959-5525 to make your THRP - Wage application
Watch! Life in the Tax Lane - January 2022
This FREE 10-minute video for Canadian Tax Professionals includes rapid-fire discussion of select recent developments in the wonderful world of Canadian tax presented by the Video Tax News Team.
Sources:
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Expanded Eligibility to Lockdown Support Programs
On December 22, 2021 the government announced that it will:
Expand the Local Lockdown Program to include employers subject to capacity-limiting restrictions of 50% or more; and reduce the current-month revenue decline threshold requirement to 25% (it was previously 40%). Eligible employers will receive wage and rent subsidies from 25% up to a maximum of 75%, depending on their degree of revenue loss. The rate of subsidy will continue to be calculated on a 1:1 basis (e.g. 25% revenue decline = 25% subsidy). The 12-month revenue decline test continues to not be required in order to access this support.
Expand the Canada Worker Lockdown Benefit to include workers in regions where provincial or territorial governments have introduced capacity-limiting restrictions of 50% or more. Furthermore, these regulatory changes would include reducing the minimum number of days a lockdown order needs to be in place to meet the new definition to 7 consecutive days, down from 14 consecutive days. As announced previously, this benefit will provide $300 a week in income support to eligible workers who are directly affected by a COVID-19-related public health lockdown, and who have lost 50% or more of their income as a result.
These updated regulations will apply from December 19, 2021, to February 12, 2022, during which time it is expected that public health authorities will continue to implement “circuit-breaker” restrictions that limit the spread of the Omicron variant of COVID-19 across Canada.