Tax Tip Thursday

There’s good news and bad news this week, unfortunately… I’d ask which you want to hear first, but you can choose to read whichever you’d like!

I’ll be starting with the bad news.

The Bad News

Many business owners took on CEBA Loans, which gave eligible businesses as much as $60,000.

But for many across Canada, the CEBA loans are coming back to bite them. According to Dan Kelly, the president of the Canadian Federation of Independent Businesses (CFIB), the federal government has now deemed 50,000 businesses that took out CEBA ineligible.

Kelly believes the majority of the 50,000 businesses were disqualified for minor technicalities, like incorrect paperwork.

There could be various reasons for all of this happening, from incomplete paperwork, honest mistakes in terms of eligibility to people deliberately taking advantage of the program, but regardless of the reason, the businesses will have to deal with the aftermath.

This will be very costly for some of these businesses, although they may not have had a choice in the matter at that time.

The little bit of silver lining is that CFIB has lobbied the EDC (Export Development Canada) successfully to at least maintain the repayment date of December 2023.

So be sure to review my show from a couple of weeks ago about preparing yourself for the repayment date.

Check out this link for some context: https://huddle.today/2022/10/19/thousands-of-businesses-told-they-were-ineligible-for-ceba-loans/

The Good News

Residents who already receive the credit will start getting the increased payments in early November. But are YOU eligible? Let’s find out.

The feds’ plan to double the Goods and Services Tax (GST) credit for half a year has been approved. The goal of the limited-time bonus is to diminish the impact of inflation and make life more affordable for many Canadians. Officials estimate that about 11 million eligible taxpayers will be able to get more money back from the government as a result.

The measure, part of Bill C-30, the Cost of Living Relief Act (Targeted Tax Relief), received Royal Assent on October 18.

Who is eligible for Canada’s GST credit?

The GST credit gives back some of the money low-income residents pay in federal sales tax.

Recipients must be residents of Canada for income tax purposes and either be at least 19 years old, have (or had) a spouse or common-law partner, or are (or were) a parent who lives with a child.

Eligibility for the GST (TPS in French) credit depends on a household’s size and income. Qualifying Canadians with low or modest incomes are automatically considered for the credit when they file their taxes.

Families who had a net income of less than $39,826 in 2021 will receive the maximum value. The credit value decreases above that amount depending on the living situation of the eligible person.

You can find the full eligibility criteria online.

How much was the GST payment before?

For the 2022-2023 pay periods, the maximum payments are:

• $467 for singles without children;
• $612 for married or common-law partners;
• $612 for single parents; plus
• $161 for each child under the age of 19.

So, for example, a single parent with two children and a net income under $39,826 would get $934 ($612 + $161 + $161) spread across two pay periods six months apart.

How much extra will you get now that GST payments are doubled?

The six-month credit doubling means recipients will receive an extra payment equal to one of the two six-month installments.

So, in the example of the single parent with two children, they’ll get an extra $467 ($934 divided by two), as would a couple with two children who meets the income requirement (half of $612 + $161 + $161).

Singles with no children and a net income under $39,826 would get up to $234 in additional cash.

What are the GST payment dates?

Online, the government says GST credit payments “usually” go out on the fifth day of July, October, January and April, though it can take a few days for the money to actually show up in recipients’ accounts.

The extra GST credit payments will automatically be sent out to qualifying people starting this November.

Wondering what you’re entitled to?

You should be able to see your GST entitlements online through MyCRA if you have access. If you don’t or you’re having trouble finding it, Call us today!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.