The T1 individual filing deadline for 2020 is this Friday, April 30, and for many Canadians, this year’s filing will be a little different. That’s especially true for those who worked from home or needed government benefits during the COVID-19 pandemic.
If you already received CERB assistance, you may have to pay taxes – not the full amount, just the taxable portion like any other income you earn. But you will not have to pay it back immediately. You have what national tax specialist Gerry Vittoratos with UFILE calls an “interest holiday.”
“If you received those benefits during the year and you owe money on your tax return, you don’t have to pay your balance owing until the 30th of April of next year,” he explained.
However, you are expected to submit your tax forms by Friday to avoid a late penalty.
“The penalty is quite stiff,” he said. “What the government will do is if you owe money to them and you don’t file your tax return by April 30, then they will charge you five percent on the amount that you owe and then one percent for every month that you are late with filing your return. There is no holiday on that one.”
Vittoratos says those who worked from home will likely get some sort of refund, pointing out there’s a simplified way to declare that on the return this year.
Specifically, the government has introduced a new method of deducting home office costs. That method is known as the Temporary Flat Rate Method.
“For Canadians who were required to work from home for … more than 50 percent of the time for four consecutive weeks can now claim a $2 per day deduction, up to a maximum of 200 days for the 2020 tax year,” he explained.
He says that essentially means your maximum deduction becomes $400.
“What’s great about it is the fact that … you have no administrative requirements. The government is not going to ask you for any cooperative documents, meaning a signed form from your employer or any other proof or receipts. All you have to do is meet those basic criteria,” Vittoratos said.
He notes people still have the option to instead use what he calls the “detailed method.”
“Where you can claim actual expenses that you incur for your home office. For example, rent, utilities, stationery — paper items, pens, etc. These are items which you can claim on a pro-rated basis based on … the square footage that your home office represents,” he said, noting that only makes financial sense if you would be claiming more than $400.
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