{"id":4695,"date":"2021-04-12T15:22:35","date_gmt":"2021-04-12T19:22:35","guid":{"rendered":"https:\/\/amyotgelinas.com\/corporate-tax-returns-what-to-do-with-federal-assistance-received-in-2020\/"},"modified":"2021-04-12T15:22:35","modified_gmt":"2021-04-12T19:22:35","slug":"corporate-tax-returns-what-to-do-with-federal-assistance-received-in-2020","status":"publish","type":"post","link":"https:\/\/amyotgelinas.com\/en\/corporate-tax-returns-what-to-do-with-federal-assistance-received-in-2020\/","title":{"rendered":"Corporate tax returns: what to do with federal assistance received in 2020?"},"content":{"rendered":"
Federal grants for COVID-19<\/span> pandemic must be included in company tax return<\/strong><\/div>\n
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Contractors had access to several federal government programs in 2020<\/span> to help them through the COVID-19<\/span> pandemic.<\/p>\n

The amounts received will now have to be taken into account when the time comes to file the company’s income tax return.<\/p>\n

How do you find your way around? Here are the answers from the Canada Revenue Agency (CRA). <\/p>\n<\/div>\n<\/div>\n<\/div>\n

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1. Do I have to include amounts received from various programs on my income tax return?<\/strong><\/h2>\n

The programs and subsidies offered by the federal government under COVID-19<\/span> are subject to various conditions regarding the taxation of income. Here are the broad outlines for the main CRA programs. <\/p>\n<\/div>\n<\/div>\n

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Program name: <\/strong>Canadian Emergency Commercial Rental Assistance (CECRA) for small businesses<\/div>\n
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How do I declare my income? <\/strong>The owner of the commercial property must include the forgivable loan on his or her income tax return. The loan itself<\/span> is not taxable. However, any portion of the loan that can be written off is taxable in the year the loan is received. <\/div>\n<\/div>\n<\/div>\n
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Program name:<\/strong> Canadian Emergency Wage Subsidy (CESS)<\/div>\n
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How do I declare my income? <\/strong>The employer must include this subsidy on its income tax return. However, the eligible remuneration paid to the employee is a deductible expense for the employer. <\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Program name: <\/strong>Canada Emergency Rent Grant (CERG)<\/div>\n
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How do I declare my income? <\/strong>The company must include this subsidy on its income tax return.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Program name: <\/strong>Temporary 10%<\/span> wage subsidy for employers<\/div>\n
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How do I declare my income? <\/strong>The employer must include this subsidy on its income tax return. If not already done, the employer should complete the Temporary 10%<\/span> Wage Subsidy for Employers self-identification form<\/a> and send it to CRA. <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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2. What to do with money received from provincial programs?<\/h2>\n

Provincial and territorial governments have their own corporate income tax legislation, which theCRA<\/a> administers on their behalf, except for Quebec<\/a> andAlberta<\/a>.<\/p>\n

Consulting provincial authorities can help determine the federal tax treatment of amounts received from provincial programs. However, federal tax and the appropriate treatment of amounts received are determined by the Income Tax Act (ITA), not by the provincial authority concerned. It is your responsibility to include any assistance you receive, regardless of its source, on your income tax return. <\/p>\n

3. How will loans granted under the Canadian Business Emergency Account (CBEU) and the Heavily Affected Sector Credit Program (HACCP) Guarantee be taxed?<\/h2>\n

For both programs, only the portion of the loan that can be written off is taxable. Therefore, if the amount of the loan that can be written off is $10,000<\/span>, this amount must be included in the company’s taxable income in the year in which it is received. <\/p>\n