FROM: D. Jae Gold, BA, CPA, CA, CFE
GOLD ENTERTAINMENT ACCOUNTANTS
A DIVISION OF G & G PARTNERSHIP, LLP
Dear SAC members, clients and friends of Gold Entertainment Accountants:
The past number of weeks have been extremely difficult for our clients & friends (individuals, families, businesses) in the wake of the COVID-19 pandemic. This virus is having a dramatic impact on our lives and businesses. Firstly, we wanted to take a moment to let you know that during these unusual times, we hope and pray that our clients, friends and families are staying safe, healthy and productive. We have taken steps here at our office for the safety of our staff, clients and community and will continue to do so.
This document is meant as a summary of various items that affect those in business (and particularly in the cultural areas) from an accounting / tax / small business viewpoint. Please read it right to the bottom! At a time like this, the number one goal is to have you and your family stay safe and in good supply of food and medicine, and distanced from others. And not stress about tax season!
To help with this, the Federal Government, the Ontario Government and the CRA (federal tax department) have laid out plans for relief of worry and stress regarding tax filing and tax payments. Below is a compilation of information from various sources of interest to the music industry regarding tax filings, tax payments, and business cash flow. There are changes daily to these new government programs, please note it is a very fluid situation. This information is correct and up to date as at March 24, 2020.
Although there are extensions for tax filings and payments noted below, we encourage all taxpayers to submit their tax information (personal or corporate) as soon as possible to their accountants for processing and filing. Some assistance will be based on the 2019 personal tax return assessments.
1) In order to provide greater flexibility to Canadians who may be experiencing hardships during the COVID-19 outbreak, the CRA will defer the filing due date for 2019 tax returns of individuals. The return filing due date will be deferred from April 30, 2020 until June 1, 2020. (a one month extension from April 30th). Note that self employed individuals have June 15, 2020 as a filing deadline, and that has not changed.
2) For individuals, the CRA will allow all taxpayers to defer until September 1, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020, and before September 1, 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. Note that taxes owed prior to March 18, 2020 and all payment plans already in effect are not changed by this deferral, they are still due.
3) For low and modest income families, the Government will provide a one-time special payment by early May 2020 through the GSTC. This will double the maximum annual GSTC payment amounts for the 2019-20 benefit year. The average boost to income for those benefitting from this measure will be close to $400 for single individuals and close to $600 for couples. In order to qualify for this credit, you must file the 2019 income taxes in a timely fashion, hence our encouragement to all taxpayers to submit their personal tax information asap. Changes to the Canada Child Benefit (“CCB”)…….. For individuals receiving the CCB, payments will be increased for the 2019-20 benefit year, by $300 per child.
4) The Government will be waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020. The requirement to provide a medical certificate to access EI sickness benefits will be waived as well. The EI sickness benefit is 55% of an employee’s earnings, up to a maximum of $573 per week. The one-week waiting period for EI sickness benefits will be waived if individuals are quarantined; and, as a result, they are able to be paid for the first week of their claim. If an individual cannot complete the claim due to quarantine, the claim can be backdated to cover the period of delay. Priority will be given during application processing for those under quarantine, without the need to provide a doctor’s note confirming contraction of the virus.
5) The federal government has created the new Canada Emergency Response Benefit (“CERB”) This program provides $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The CERB covers Canadians who have lost their job, are sick, quarantined or taking care of someone who is sick with COVID-19, as well as working parents who must stay home to care for children due to school and daycare closures. The CERB applies to wage earners, as well as contract workers and self-employed individuals who are not otherwise eligible for EI. Additionally, workers who are still employed but are not receiving income because of disruptions to their work situation due to COVID-19 also qualify for the CERB. The CERB is expected to be accessible through a secure web portal starting in early April as well as via an automated telephone line or via a toll-free number.
6) To support businesses facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10 per cent of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as nonprofit organizations and charities. Note that the definition of ‘Eligible Employer’ includes individuals and partnerships.
7) Although there has been speculation about extending the corporate filing deadline, no formal pronouncements were made by the Government in respect of corporate filing deadlines.
8) For businesses, the CRA will allow all businesses to defer, until September 1, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. This is for self employed businesses as well as incorporated businesses.
9) The CRA will not initiate any new audits for the next 4 weeks. For any ongoing audits that are currently in process, the CRA is suspending all activity as well. COLLECTIONS, AUDITS AND TAX DISPUTES………The CRA has released an official statement providing updates on its collection, audit and objection strategy amid the COVID-19 concerns. The CRA is temporarily revising how it administers collection, audit and objection matters.
10) The Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by $300 per child. This will be based on the 2019 income tax return, another reason to get your 2019 personal tax returns filed quickly.
11) The Government will be placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all individuals currently in the process of repaying these loans.
12) Canada’s large banks have confirmed that based on each individual situation, they will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products (bank loans, lines of credit, etc). If you want to pursue this, call your mortgage company to start the application process.
13) Ontario’s Minister of Finance will release an economic and fiscal update on March 25, 2020, instead of a full budget. This update will include a realistic one-year outlook based on current economic projections and will aim to provide certainty to hospitals, schools, municipalities, and other government partners for the year to come.
Special for the music industry ……. CIMA, the Canadian Independent Music Association (of which our firm is a member) has provided the following valuable information and links:
14) Special for the music industry ……. CIMA, the Canadian Independent Music Association (of which our firm is a member) has provided the following valuable information and links:
- Airline Cancellation Policies: A comprehensive guide by Forbes can be found here.
- Alberta Music has shared information for Albertans and Canadians alike on how to prepare for COVID-19 in the arts sector. Get more information here.
- Bandzoogle has put together this handy blog: How musicians can ask fans for support during the coronavirus pandemic.
- Canada Council for the Arts: Information about CCA’s cancellation policy can be found here
- The Canadian Federation of Musicians (CFM): has sent an open letter to federal and provincial ministries overseeing culture, social security and employment.
- Canadian Live Music Association‘s Request for relief to the Canadian government can be found here.
- Canada Public Health has info about the situation available here.
- CAPACOA is asking you to track cancellations affecting the Canadian live performance sector here.
- Event Safety Alliance: Preparing your organization for COVID-19. More information can be found here.
- FACTOR: Information about FACTOR’s cancellatoin policy can be found here.
- Government of Canada Trade Commissioner Service: Resources for Canadian businesses can be found here.
- Music BC has provided information and resources on their website and is encouraging company and artists to reach out with any questions or concerns regarding Music BC’s programs.
- Manitoba Music will be providing information and resources, including support efforts. Keep an eye on their updates here.
- Music Managers Forum Canada has an incredibly thorough resource page that is being constantly updated here.
- MusicOntario will be reposting all sorts of things on our socials/to our stories – have a peek there for various updates, interesting content from the community, streaming events, and other tidbits to help pass the time.
- PRS Foundation: Advice for overseas activities or performances. More information here.
- Radio Starmaker: The Board of the Radio Starmaker Fund wants to inform all stakeholders that any previous tour dates that were approved and were to take place between February 15th and August 31st of this year will be fully funded if they were canceled as a result of the coronavirus. All you will need to do when filling out final paperwork is indicate the reason for the cancellation was coronavirus – no other proof will be necessary. This same policy will also be in effect with regard to tour dates approved by the Board for Round 74. We are currently examining the impact of the coronavirus outbreak and the implications it may have on future touring. Currently, when we open our next round we are considering a moratorium on requests for tour funding for all performances from April 1st to May 31st of this year given the very high likelihood of cancellation. We will be monitoring this situation over the next few weeks and making a final determination on or before April 10th when we plan to open the next round of funding. In the meantime, we wanted everyone to know this is a possibility as tour plans are made this year.
- SaskMusic will be launching an emergency relief fund for music industry professionals impacted by lost income due to COVID-19. More information can be found here.
- Unison Benevolent Fund has information about how they can help here, or you can call 1-855-986-4766 for inquiries to help you deal with the financial or emotional impact of coronavirus.
- Worldwide Independent Network has a list of resources for the indie music community across the work here.
- World Health Organization: https://www.who.int/
- Live-streamed concerts from empty venues: URGNT TRNTO
- I Lost My Gig Canadais a support group on Facebook for folks from various disciplines in the Gig Economy to gather, listen, and share.
- Toronto Musicians Association has information and resources for financial assistance and bill payment relief here.
- Ontario Presents is offering to host online phone-based meetings free of charge for any Ontario-based artist, agent, presenter, or other art presenting industry professional who needs to host a meeting but does not have the means to do so. You may contact [email protected].
- Other resources:
IATSE, information for film and TV workers https://www.iatse.net/coronavirus-update-portal
ACTRA, information for actors and musicians https://www.actratoronto.com/coronavirus-updates/
15) For those operating through a corporation, if you need to change your payroll remittances due to 6) above, and would like assistance, do not hesitate to contact your accountant right away.
16) For anyone taking money out of RRSP’s, note that this will be income in the year of withdrawal. If you take the $ out in $10K increments, then less tax will be deducted (for maximum cash flow now), but taxes may be due next year on the 2020 cashed in RRSP’s.
17) Other ways to earn income or use your spare time: a) sign up with hashtagpaid.com as an influencer if you have 5,000 + followers on Instagram; b) Skype, Zoom calls or facetime music/acting/voice lessons; c) write / edit/ create new works, or take courses to enhance skills.
Note that most accounting firms are encouraging their clients to use a digital client portal to submit the 2019 personal tax information as well as any corporation information that needs to be submitted. Our portal system has been in place for a number of years now, is working great, and has added efficiency to the tax preparation services we provide.
FIND THE LINK TO OUR CLIENT PORTAL HERE: http://www.ggca.com/
FIND THE LINK TO OUR TAX CHECKLIST HERE: http://rocknrollaccountant.com/home2/#services
The CRA encourages those who need to update or access their tax information to use one of the CRA’s self-serve options, such as My Business Account or the CRA BizApp mobile web application.
If our firm can be of assistance to you, please do not hesitate to contact our office. The partners in our firm remain vigilant and are monitoring the situation and responding as conditions evolve.
The Partners of Gold Entertainment Accountants
(A division of G & G Partnership, LLP)