In the Federal government’s Throne Speech on September 23, 2020, it was announced that the Canada Emergency Wage Subsidy will be extended to July 2021. We have previously informed you of the added complexities and scaling back of the program between September to December. More changes will be announced in the coming weeks and we will continue to keep you informed (and help with the application process).
In the meantime, CRA has begun to review businesses and send out audit requests for information, which are 9 pages in length and extensively detailed – requesting among other things, two years of bank statements and employment contracts. This audit process will be a daunting task and we, at HS & Partners, are here to help.
With the year-end approaching, we want to remind you that CEWS is taxable. Corporations and Partnerships must included the amount of the wage subsidy received on their Annual Return when calculating taxable income. This however will not affect the revenue calculation for CEWS in subsequent periods. The definition of “qualifying revenue” for CEWS allows the exclusion of funding received from government sources.
You will also be expected to report the amount of CEWS that was used to pay each of your employees’ salaries on their T4s, increasing the complexity of T4-slip preparation. Additional requirements will be released before the year-end.