Tax Tips: Third Quarter 2020

We provide tax tips on available benefits, CRA policies, and more.

3RD QUARTER 2020 TAX TIPS

Overview

COVID-19 Supports

• As of August 9, 2020, the Government has approved 813,570 Canada Emergency Wage Subsidies (CEWS), with a total value exceeding $26 billion.

Working From Home: Reimbursing Employees for Technology Costs

• CRA was asked whether amounts paid to an employee for costs of equipment for working remotely would be a taxable benefit.

Real Estate Projects: Watch Out!

• CRA are reviewing transactions for several items such as:
  • property flips on account of income;
  • ineligible principle residence claims;
  • commissions on sales;
  • pre-sale condo assignments; and
  • eligibility for the GST/HST new housing and rental rebates

Loans for Value: Income Splitting Tool

• Consider setting up a loan for value if there is significant investment capital available, and a family member at a lower marginal tax rate.

Employment Insurance (EI): Voluntary Departure

• In a Federal Court of Appeal case, the Court reviewed Service Canada’s decision to deny EI benefits on the basis that the individual left his employment voluntarily.

Changes to Payroll: Correcting Errors

• CRA released the updated guide RC4120 Employers’ Guide – Filing the T4 slip and Summary providing detailed instructions on addressing issues on clerical, administrative, or system errors resulting in salary overpayment.

Temporary Lay-Offs: Supplemental Unemployment Benefit (SUB) Plans

• A SUB plan allows an employer to make supplemental payments to Employment Insurance (EI) benefits without eroding those EI benefits.