COVID-19 April 1, 2020 Update
In this update, we discuss the following:
- details about the Federal Temporary Wage Subsidy for Employers that announced today
- How to register for CRA My Account and direct deposits
Federal Temporary Wage Subsidy for Employers
Original subsidy
In our update of March 27, 2020, we indicated that the Federal Temporary Wage Subsidy for Employers had been increased from 10% to 75% of remuneration paid and backdated to March 15, 2020.
However, the government has now clarified that the initial taxable subsidy remains at 10% of remuneration you pay between March 18, 2020, and June 20, 2020. The subsidy can be used to reduce your source deductions for the pay periods after March 18, 2020.
This wage subsidy is still not available to non-CCPCs.
Additional subsidy
In addition to the original subsidy, the Federal government announced a taxable subsidy at a rate of 75% up to the first $58,700 normally earned by employees, or $847 per week.
The subsidy will be based on salaries or wages actually paid during the period from March 15 to June 6, 2020.
The subsidy is not available for remuneration paid to an employee in a week that falls within a four-week-period for which the employee is also eligible for the Canadian Emergency Response Benefit.
The subsidy, which can be reduced by any amount received under the original wage subsidy, will be a reimbursement of remuneration paid in the previous month.
The first subsidy payments are expected to be issued in the middle of May.
This subsidy is available to all employers, including non-CCPCs, who have suffered a drop in gross revenues of at least 30% in March, April or May when compared to the same months in 2019.
Eligible employers must apply for the subsidy each month by attesting that they qualify.
An online portal on the Canada Revenue Agency website is being developed that eligible employers, will use to apply for the subsidy.
The portal is expected to be operational in 3 to 6 weeks.
The Federal government is developing additional guidance on the definition of revenue, especially for charities and not-for-profit organizations, and how the subsidy is calculated, and we will update as it becomes available.
Register for CRA My Account and Direct Deposits
We recommend that individuals and businesses register for the CRA My Account and Direct Deposits as this will speed up the receipt of subsidies and other benefits.
The following is the link to the CRA webpage that explains how individuals, corporations, trusts, and non-residents register for direct deposits:
https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/direct-deposit.html