{"id":4704,"date":"2021-04-16T13:58:41","date_gmt":"2021-04-16T17:58:41","guid":{"rendered":"https:\/\/amyotgelinas.com\/corporate-income-tax-return-what-to-do-with-the-federal-support-received-in-2020\/"},"modified":"2021-04-16T13:58:41","modified_gmt":"2021-04-16T17:58:41","slug":"corporate-income-tax-return-what-to-do-with-the-federal-support-received-in-2020","status":"publish","type":"post","link":"https:\/\/amyotgelinas.com\/en\/corporate-income-tax-return-what-to-do-with-the-federal-support-received-in-2020\/","title":{"rendered":"Corporate income tax return: What to do with the federal support received in 2020?"},"content":{"rendered":"
Federal subsidies to cope with the COVID-19<\/span> pandemic must be included in the company’s income tax return<\/div>\n
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Entrepreneurs had access to several federal government programs in 2020<\/span> to support them during the COVID-19<\/span> pandemic.<\/div>\n<\/div>\n
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When filing an income tax return, a company will now have to consider the amounts it received.<\/p>\n

How to find your way around? The following are the answers from the Canada Revenue Agency (CRA): <\/p>\n<\/div>\n<\/div>\n<\/div>\n

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1. Am I required to report the amounts received from various programs on my income tax return?<\/h2>\n

The programs and subsidies provided by the federal government in the context of COVID-19<\/span> are subject to various conditions with respect to income taxation. The key aspects of the CRA’s main programs are as follows: <\/p>\n<\/div>\n<\/div>\n

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Name of the program<\/strong><\/div>\n
How to report income?<\/strong><\/div>\n<\/div>\n<\/div>\n
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Canada Emergency Commercial Rent Assistance (CECRA) for small businesses<\/strong><\/span><\/div>\n
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The property owner of the commercial building must include the forgivable loan on his or her income tax return. The loan itself is not taxable. However, any part of the loan that is forgivable is taxable in the year in which the loan is received. <\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Canada Emergency Wage Subsidy (CEWS)<\/strong><\/div>\n
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The employer must include this subsidy on his or her 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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Canada Emergency Rent Subsidy (CERS)<\/strong><\/div>\n
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The company must include this subsidy on its income tax return.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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10% Temporary Wage Subsidy for Employers<\/strong><\/div>\n
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The employer must include this subsidy on his or her income tax return. The employer must complete the 10% Temporary Wage Subsidy Self-identification<\/span> Form<\/a> for Employers and send it to the CRA if this has not already been done. <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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

Provincial and territorial governments legislate their corporation income tax provisions, but the CRA<\/a> administers them, except for Quebec<\/a> and Alberta<\/a>.<\/p>\n

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

3. How will the loans granted by the Canada Emergency Business Account (CEBA) and the Highly Affected Sectors Credit Availability Program (HASCAP) Guarantee be taxed?<\/h2>\n

For these two 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 was received. <\/p>\n