CEWS, TEWS & CRA Reporting Update

This Canadian wage subsidy program has been extended until June 2021 but the details of the program after December 19, 2020 (period 10) have not been released. The Government has proposed that this would return to 75%, but this is not yet approved. They have also not provided any recent update re furloughed employees, or a stipulation re pre-crisis pay limits.

Canadian Emergency Wage subsidy (CEWS)

This Canadian wage subsidy program has been extended until June 2021 but the details of the program after December 19, 2020 (period 10) have not been released. The Government has proposed that this would return to 75%, but this is not yet approved. They have also not provided any recent update re furloughed employees, or a stipulation re pre-crisis pay limits.

The most recent updates that we have for the program allow the maximum subsidy rate of 65% (40% base + 25% top-up) to carry through to December 19, 2020.

For the four periods from March 15 – July 4, 2020 (CEWS 2.0), claims were based on a revenue drop of 30% or more to be eligible for the subsidy. For the 5th and subsequent periods, the subsidy consists of two components: the base subsidy which uses the percent of revenue decline for current month, and the “top-up” subsidy which is available if the average % decline in the previous three months is greater than 50%. CEWS 2.0 is complex with considerable analysis being required to get the maximum claim allowed. When applying for these periods, you must ensure no sales are entered for the period after filing, as this would impact the calculated subsidy that has been applied for.

Please keep in mind that the CEWS will be Taxable at the end of the period is relates to and not when the cheque is received. This may mean that you need to make an accrual depending on your year-end date.

Applications must be made by January 31, 2021 OR 180 days after the end of claim period (whichever comes later).

 

10% Temporary Wage Subsidy (TEWS)

If you claimed the temporary wage subsidy, either on its own or as part of a CEWS application, or are going to claim it at year end, you will need to submit Form PD27 “10% Wage Subsidy Self-Identification” form for each Payroll account with CRA. 

This form will allow for the reconciliation between payroll remittances and deductions reported on your T4 summary.

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/pd27.html

The form can also be submitted through “my business account” with CRA. If you elected not to participated in both TEWS and CEWS, you are not required to submit the form.

If you need assistance, please email or call us (709)364-7300 to review your options.

Debra & the entire team at Feltham & Associates

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