Wildfires: Apply for Taxpayer Relief Provisions

It may not be the first concern, but Canadians affected by wildfires may worry at some point about the tax consequences of lost records or missed filing deadlines – the next one on June 16 for those filing T1 returns with proprietorship income. Fortunately, the CRA offers Taxpayer Relief Provisions when there are circumstances beyond a taxpayer’s control, including natural disasters, serious illness or death in the family, or errors made by the CRA, which may trigger penalties and interest due to late or incomplete tax filings. Here’s what you need to know.

It’s April 1st next week, and that means a number of rates for the second quarter to reflect inflation calculations.  This includes prescribed interest rates that affect how much you will receive on interest on refunds owed to you by CRA and pay on CRA overdue balances due from you.  Will seniors get a raise on their OAS payments?  What will be the prescribed interest charge on shareholder loan accounts?  Here are the details:

According to the Vanier Institute, the pandemic that began a year ago may have a significant effect on family life in Canada, particularly for those who experienced unemployment as part of the equation.  Families who may have separated or divorced in 2020 will now have significantly altered income tax profiles.  Here is what you need to know to ensure support payments are properly reported.  

“My 69-year-old mother now lives with us, and we had to make renovations to our home so that she could be safe after her accident at her personal care home.   Can we write off the costs of those renovations?”  It’s not an uncommon question this year as Canadians coped with the stress of the pandemic. The Home Accessibility Tax Credit can provide some financial relief in these cases.

The Refundable Medical Expense Supplement is a tax credit claimed on line 45200 of the T1 return targeted at lower income earners.  If the credit exceeds the taxes payable, the balance will be refunded to the taxpayer. CRA provides an area on the Federal Worksheet that accompanies the income tax package to make the calculations. The trouble is, few people know about it.

Filing a tax return is always a good idea, but chances are CRA will owe you money even if you don’t have any income at all.  That’s because you may be eligible for some refundable tax credits. However, for the majority of people who have at least some income – and that includes teenagers who qualified for the CERB and other pandemic supports this year, it’s important to know the answer to this question:  who should file a tax return and who must file one? 

It’s not too late to learn to prepare personal income tax returns from your home or office and now you can confidently learn and practice doing 2020 tax returns with Knowledge Bureau’s newly released 2021 Professional Basic Tax Course.