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New Extension of the Credit for Contributions to the Health Services Fund

Wed, 08/19/2020 - 15:45

Employers with an establishment in Québec that qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period.

The CEWS was initially granted for a 12-week period (March 15 to June 6, 2020). On May 15, 2020, it was extended until August 29, 2020. The credit for contributions to the health services fund was also extended through August 29, 2020.

On July 17, 2020, the CEWS was extended again, this time until November 21, 2020. As a result, the credit for contributions to the health services fund has also been extended until November 21, 2020. The qualifying periods for the credit for contributions to the health services fund are the same as those for the CEWS.

For more information about the extension, see information bulletin 2020-11, published by the Ministère des Finances.

For information about the credit for contributions to the health services fund, click Credit for Contributions to the Health Services Fund in Respect of Employees on Paid Leave Due to the COVID-19 Pandemic or consult the FAQ for businesses.

Adjustment to the Calculation of Employee Remunerated Hours: Small Business Deduction

Wed, 07/15/2020 - 13:30

A Canadian-controlled private corporation can, under certain conditions, benefit from a reduced income tax rate for its taxation year. This measure is called the “small business deduction” (SBD) and applies to the first income bracket of an eligible business operated by the corporation in Canada.

A corporation may not be entitled to the SBD or may be required to use a reduced rate in the calculation of the SBD if it does not meet certain eligibility requirements with respect to the number of remunerated hours of its employees and the proportion of activities in the primary and manufacturing sectors.

A corporation can use the highest rate to calculate the SBD for a taxation year if it meets one of the following two conditions:

  • For the taxation year, the remunerated hours of its employees totalled at least 5,500 hours.
  • For the preceding taxation year, the remunerated hours of its employees and those of the corporations with which it is associated totalled at least 5,500 hours.

However, given the exceptional COVID-19 health crisis, the calculation of the remunerated hours of a corporation's employees has been adjusted. Therefore, if all or part of the corporation's taxation year is included in the period from March 15 to June 29, 2020, the number of hours for the taxation year is deemed to be equal to the result of the following calculation: the number of remunerated hours of the corporation's employees for the taxation year multiplied by the ratio of 365 to the number of days in the taxation year that are not included in the period.

The adjustment does not apply to the number of remunerated hours calculated for the preceding taxation year. The adjustment also applies to partnerships.

Changes in the Tax Credit for Childcare Expenses in Respect of Expenses Incurred to Take Distance Courses

Fri, 07/10/2020 - 10:17

As announced by the Ministère des Finances, our interpretation of the expression “to attend a qualified educational institution” has changed for purposes of the tax credit for childcare expenses.

Courses offered by a qualified educational institution can now be taken at a distance without the need for physical presence or virtual presence at a fixed or interactive time with the professor or the class. However, virtual presence will remain mandatory for courses offered by a secondary school if physical presence is not required.

The change applies retroactively to January 1, 2020.

End of the Extension for GST/HST and QST Remittances

Tue, 06/30/2020 - 17:15

On March 27, 2020, the federal government and the Québec government announced that businesses had until the end of June to remit the amounts owing on their GST/HST and QST returns. This extension is ending on June 30, 2020, as planned.

We encourage businesses and self-employed people to use our online services to avoid postal delays.

If you continue to experience difficulty in remitting GST/HST and QST amounts owing, contact us to enter into a payment agreement or to apply to have your penalties and interest cancelled.

For more information see the following pages:

Extension of the Credit for Contributions to the Health Services Fund Announced in the Tax News Article of April 30, 2020

Tue, 06/02/2020 - 16:12

Employers that have an establishment in Québec and qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period.

The CEWS was initially granted for a 12-week period (March 15 to June 6, 2020). However, the federal Minister of Finance announced on May 15, 2020, that it would be extended for another 12 weeks until August 29, 2020. Therefore, the period covered by the credit for contributions to the health services fund has also been extended through August 29, 2020.

For more information, see information bulletin 2020-8 on the Ministère des Finances website.

Return Filing Deadline Extended for Some Corporations and Trusts

Mon, 05/25/2020 - 11:59
Corporations

Revenu Québec is extending the income tax return filing deadline for certain corporations to September 1, 2020.

This new relief measure is for corporations that would have otherwise been required to file their income tax return between June 1 and August 31, 2020 (corporations whose taxation year ended between November 29, 2019, and February 29, 2020).

In March 2020, Revenu Québec announced that corporations normally required to file their income tax return between March 17 and May 31, 2020, would have until June 1, 2020, to do so. The payment deadline for instalment payments and any income tax balance owing that would otherwise be due between March 17 and August 31, 2020, was extended to September 1, 2020, for both individuals and corporations.

The main deadlines for corporations given the exceptional situation caused by COVID-19 are set out in the table below.

Taxation year end date Income tax payment deadline Extended payment deadline Filing deadline Extended filing deadline Between September 17 and November 29, 2019 Between November 17, 2019, and January 31, 2020 N/A Between March 17 and May 31, 2020 June 1,  2020 Between November 30 and December 30, 2019 Between February 1 and 28, 2020 N/A Between June 1 and 30, 2020 September 1, 2020 December 31, 2019 February 29, 2020 N/A June 30, 2020 September 1, 2020 Between January 1 and 16, 2020 Between March 1 and 16, 2020 N/A Between July 1 and 16, 2020 September 1, 2020 Between January 17 and February 29, 2020 Between March 17 and April 30, 2020 September 1, 2020 Between July 17 and August 31, 2020 September 1, 2020 Between March 1 and June 30, 2020 Between May 1 and August 31,  2020 September 1, 2020 Between September 1 and December 31, 2020 N/A Trusts

Revenu Québec is extending the information return and income tax return filing deadlines for certain trusts to September 1, 2020.

This new relief measure is for trusts that would have otherwise been required to file their information return or income tax return between June 1 and August 31, 2020 (trusts whose taxation year ended between March 2 and May 31, 2020).

In March 2020, Revenu Québec announced that trusts normally required to file their information return or income tax return between March 31 and May 31, 2020, would have until June 1, 2020, to do so.

The filing deadlines for trusts given the exceptional situation caused by COVID-19 are set out in the table below.

Taxation year end date Filing deadline Extended filing deadline December 31, 2019 March 30, 2020 May 1, 2020 Between January 1 and March 1, 2020 Between March 31 and May 31, 2020 June 1, 2020 Between March 2 and May 31, 2020  Between June 1 and August 31, 2020 September 1, 2020 Between June 1 and December 31, 2020 Between September 1, 2020, and March 31, 2021 N/A

Credit for Contributions to the Health Services Fund in Respect of Employees on Paid Leave Due to the COVID-19 Pandemic

Thu, 04/30/2020 - 17:10

Employers that are eligible for the Canada Emergency Wage Subsidy and that have an establishment in Québec can apply for a credit for contributions to the health services fund in respect of employees on paid leave due to the COVID-19 pandemic for a period of twelve weeks, retroactive to March 15, 2020.

The amount of the credit for contributions to the health services fund will be equal to the total amount of the contribution to the health services fund paid by an employer on the salary and wages paid to employees on paid leave during a week included in the period that starts on March 15, 2020, and ends on June 6, 2020.

Employees who do not do any work during a given week but are still remunerated by their employer are considered to be on paid leave during that week.

Application for the credit for contributions to the health services fund

The application for the credit for contributions to the health services fund must be filed with Revenu Québec at the same time as the Summary of Source Deductions and Employer Contributions (RLZ-1.S-V or RLZ-1.ST-V) for 2020.

The application must be accompanied by documents and information that will help Revenu Québec determine the amount of the credit for contributions to the health services fund to which the employer is entitled.

Reduction of periodic payments of the contribution to the health services fund

Employers can reduce the amount of the periodic payment of the contribution to the health services fund they are required to remit to Revenu Québec after April 30, 2020, by the amount of the credit for contributions to the health services fund related to the salary or wages paid to employees on paid leave before the deadline for making the periodic payment, as long as that amount was not used to reduce another periodic payment.

Reduction of the contribution to the health services fund for the creation of specialized jobs

Employers that are eligible, for 2020, for both the credit for contributions to the health services fund and the reduction of the contribution to the health services fund for the creation of specialized jobs will have to deduct the portion of an employee's salary or wages used to calculate the credit for contributions to health services fund from the eligible salary or wages used to calculate the reduction of the contribution to the health services fund for the creation of specialized jobs.

For more information, see information bulletin 2020-7 published on the website of the Ministère des Finances.

Relaxed Rules for the Tax Credit for Investment

Fri, 02/28/2020 - 09:39

Information bulletin 2018-7 announced two temporary improvements to the tax credit for investment. 

Under the first, the base rate of the tax credit was increased to 5% regardless of the zone or region where qualified property could be used. The rates of increase were also increased so that the tax credit rate ranges from 10% to 40%, depending on the zone or region where the qualified property is primarily used. 

Under the second change, corporations in the metal processing sector are entitled to an additional tax credit rate increase of 5% or 10%, depending on the zone or region where the qualified property is used, subject to certain conditions.

Originally, the expenses covered by the new measures had to have been incurred for the acquisition, after August 15, 2018, and before January 1, 2020, of property other than:

  • property acquired under a written obligation entered into before August 16, 2018;
  • property whose construction by or for the taxpayer was under way on August 15, 2018.

The expenses also had to be incurred after August 15, 2018, and before January 1, 2020.

The legislation will be amended such that these measures also apply in respect of eligible expenses incurred after August 15, 2018, and before January 1, 2020, for the acquisition, after December 31, 2019, and before January 1, 2021, of qualified property that meets one of the following conditions: 

  • the property is acquired in accordance with a written obligation entered into after August 15, 2018, and before January 1, 2020; or 
  • the construction of the property by or for the corporation began after August 15, 2018, and before January 1, 2020. 

The other terms and conditions of the tax credit announced in information bulletin 2018-7 remain unchanged.

Amateur Athlete Trusts – Extension of the Eight-Year Period

Thu, 02/27/2020 - 10:01

Under certain conditions, an amateur athlete trust can be created for an amateur athlete who is a member of a registered Canadian amateur athletic association and is eligible to compete in international sporting events as a Canadian national team member. Professional athletes do not qualify.

When an athlete has not participated in an international sporting event as a member of a Canadian national team for eight years, amounts held by the amateur athlete trust at the end of the eight-year period are deemed to have been distributed to the athlete at that time. If the eight-year period ended in 2019, it is extended to nine years so that it will end in 2020, and the deemed distribution of amounts held by the trust will occur at the end of the 2020 taxation year rather than at the end of the 2019 taxation year.

For more information, refer to Information Bulletin 2020-2 published by the Ministère des Finances.

Limits and Rates Related to the Use of an Automobile for 2020

Mon, 02/03/2020 - 15:43

The limits and rates for the deduction of automobile expenses and the calculation of the taxable benefits related to the use of an automobile for 2020 are as follows:

  • For purposes of capital cost allowance (CCA), the maximum capital cost of passenger vehicles remains unchanged at $30,000 (plus GST and QST) for vehicles purchased after 2019. 
  • The limit on the deduction of leasing costs remains unchanged at $800 per month (plus GST and QST) for leases entered into after 2019. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the maximum capital cost. 
  • The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes increased to 59 cents per kilometre for the first 5,000 kilometres and 53 cents for each additional kilometre. 
  • The limit on the deduction of interest paid on amounts borrowed to purchase a passenger vehicle remains unchanged at $300 per month for loans related to vehicles acquired after 2019. 
  • The prescribed rate used to determine the taxable benefit respecting the portion of operating expenses which relates to an employee's personal use of an automobile provided by the employer remains 28 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate remains 25 cents per kilometre.

Temporary Changes to the Tax Credit to Support Print Media Companies

Mon, 12/23/2019 - 11:10

Under certain conditions, an eligible corporation with a qualification certificate from Investissement Québec for purposes of the tax credit to support print media companies can claim the credit for qualified wages paid to eligible employees after December 31, 2018.

For a given taxation year, an eligible corporation can also claim the tax credit for part of the consideration paid to an eligible subsidiary for work done during a period included in the corporation's taxation year, which began after December 31, 2018, and ended before January 1, 2020. Specifically, it can claim the credit for the portion of the consideration that can reasonably be attributed to wages the subsidiary incurred and paid in respect of eligible employees for whom Investissement Québec issued the corporation a qualification certificate. The work must be related to information technology activities related to the production or dissemination of original written information content intended for dissemination in an eligible media of the eligible corporation.

The wages incurred and paid by the subsidiary in respect of an eligible employee cannot exceed the result of the following calculation: $75,000 multiplied by the number of days in the eligible corporation's taxation year after December 31, 2018, but before January 1, 2020, that the employee is considered an eligible employee, divided by 365. The tax credit rate is still 35%.

A corporation can also claim the credit as a member of a partnership.

For more information, see information bulletin 2019-11 published by the Ministère des Finances.

Extension of the Tax Credit for Interest on a Loan Granted by a Seller-Lender and Guaranteed by La Financière agricole du Québec

Mon, 12/23/2019 - 09:20

The Ministère des Finances has announced that the tax credit for interest on a loan granted by a seller-lender and guaranteed by La Financière agricole du Québec will be extended for five years.

An eligible taxpayer may be entitled to the tax credit if it was granted a loan further to an agreement entered into after December 2, 2014, but before January 1, 2025.

The tax credit is equal to 40% of the interest paid on the loan that is attributable to the portion of the eligibility period included in the taxpayer's taxation year.

The eligibility period begins on either January 1, 2015, or the day on which the loan agreement was entered into, whichever is later. The end date of the period is 10 years after the day on which the loan agreement was entered into.

A taxpayer that is a member of a partnership can also claim the tax credit.

For more information, see information bulletin 2019-11 published by the Ministère des Finances.

Extension of the Tax Credit Relating to Information Technology Integration

Mon, 12/23/2019 - 09:19

The Ministère des Finances has announced that the tax credit relating to information technology integration will be extended for another year.

The rate of the tax credit is 20%. It is calculated on 80% of expenditures relating to the supply of a qualified management software package and to an information technology (IT) integration contract for which Investissement Québec has issued a certificate. The rate is reduced linearly if the qualified corporation's paid-up capital is between $35 million and $50 million. It is 0% if the corporation's paid-up capital is $50 million or more.

For the duration of the tax credit, the total amount that a qualified corporation can receive regarding one or more eligible IT integration contracts is limited to $50,000.

For a qualified corporation to claim the tax credit, expenditures relating to the supply of a qualified management software package must be incurred before January 1, 2020, and an application for a certificate regarding an eligible IT integration contract must be submitted to Investissement Québec prior to that date.

A corporation that is a member of a partnership can also claim the tax credit.

For more information, see information bulletin 2019-11 published by the Ministère des Finances.

Limits and Rates Related to the QPIP for 2020

Thu, 12/05/2019 - 09:14

The Québec parental insurance plan (QPIP) maximums, threshold and rates for 2020 are as follows:

  • The maximum insurable earnings have been increased from $76,500 to $78,500.
  • The qualifying threshold remains $2,000.
  • The employee premium rate has been decreased from 0.526% to 0.494%.
  • The employer premium rate has been decreased from 0.736% to 0.692%.
  • The maximum employee premium has been decreased from $402.39 to $387.79.
  • The maximum employer premium has been decreased from $563.04 per employee to $543.22.
  • The premium rate for self-employed persons and persons responsible for a family-type resource or an intermediate resource has been decreased from 0.934% to 0.878%.
  • The maximum premium for a self-employed person or a person responsible for a family-type resource or an intermediate resource has been decreased from $714.51 to $689.23.

QPP Maximums, Exemption and Contribution Rates for 2020

Tue, 12/03/2019 - 13:46

The table below shows the QPP maximums, exemption and contribution rates for 2019 and 2020.

2019 2020 Maximum pensionable earnings $57,400 $58,700 Basic exemption $3,500 $3,500 Maximum contributory earnings $53,900 $55,200 Employee and employer 2019 2020 Base contribution rate 5.40% 5.40% First additional contribution rate 0.15% 0.30% Contribution rate for the year 5.55% 5.70% Maximum base contribution $2,910.60 $2,980.80 Maximum first additional contribution $80.85 $165.60 Maximum annual contribution $2,991.45 $3,146.40 Self-employed person and person responsible for a family-type resource or an intermediate resource 2019 2020 Base contribution rate 10.80% 10.80% First additional contribution rate 0.30% 0.60% Contribution rate for the year 11.10% 11.40% Maximum base contribution $5,821.20 $5,961.60 Maximum first additional contribution $161.70 $331.20 Maximum annual contribution $5,982.90 $6,292.80

Extension of the Tax Credit to Support the Digital Transformation of Print Media Companies

Tue, 11/19/2019 - 15:47

As announced in information bulletin 2019-9, the Ministère des Finances has extended the tax credit to support the digital transformation of print media companies for one year. 

The tax credit is intended mainly for eligible corporations that hold a qualification certificate issued by Investissement Québec for a taxation year. The qualification certificate must certify that the corporation produced and disseminated a print or digital information media including original written information content in that taxation year.

The tax credit is equal to 35% of the eligible digital conversion costs that the corporation incurred for the taxation year. The costs cannot exceed $20 million for the year. 

The eligible digital conversation costs must be incurred after March 27, 2018, but before January 1, 2024, except if they concern qualified property acquired under an eligible digital conversion contract. In this case, the qualified property must be acquired before January 1, 2023.

Introduction of a Tax Credit to Support Print Media Companies

Tue, 11/19/2019 - 14:56

An eligible corporation that holds a qualification certificate issued by Investissement Québec for a taxation year can claim the tax credit to support print media companies if it meets certain conditions. The qualification certificate must certify that, in that taxation year, the corporation produced and disseminated a print media with original written information content, such as a print publication, an information website or a mobile application dedicated to information. 

The tax credit is equal to 35% of the qualified wages the corporation incurred in the taxation year after December 31, 2018, for all eligible employees. However, an employee's annual qualified wages cannot exceed $75,000.  

A corporation that is a member of an eligible partnership can claim the tax credit for its share of the qualified wages incurred by the partnership for its fiscal period ended in the corporation's taxation year.

For more information, see information bulletin 2019-9 published by the Ministère des Finances.

New RL-1 Slip Requirement – Fees Paid to Self-Employed Building Service Workers

Thu, 11/14/2019 - 09:14

Generally speaking, you only need to report fees and other amounts paid to self-employed individuals in box O (code RD) of the RL-1 slip if you withheld Québec income tax on them.

However, beginning with the 2020 taxation year, you will have to report fees and other amounts paid to self-employed individuals for building service work performed inside or outside a public building in box O (code RD) of the RL-1 slip even if you did not withhold Québec income tax on them.

This change only concerns work and public buildings defined in the Decree respecting building service employees in the Québec region and the Decree respecting building service employees in the Montréal region.

This new requirement applies to RL-1 slips filed for 2020 onward.

Automatic Payment of the Solidarity Tax Credit to 40,000 Social Assistance Recipients Who Did Not File Income Tax Returns

Tue, 11/12/2019 - 14:48

Under Québec's tax system, taxpayers are responsible for assessing, reporting and paying their income tax. However, for some social assistance recipients, this is difficult and may make it hard for them to receive the solidary tax credit.

The tax legislation will therefore be amended so that individuals who meet the following requirements can receive the basic amount of the Québec sales tax (QST) component of the credit without filing an income tax return:

  • they received benefits under the Social Assistance Program, the Social Solidarity Program or the Aim for Employment Program for the month of December; and
  • they had yet to file an income tax return by September 1 of the following year.

The $292 basic amount for the period from July 2019 to June 2020 will be paid by June 2020.

Despite this new measure, it is important to remember that filing an income tax return is the only way for taxpayers to receive all the benefits they are entitled to. Free help completing their returns is available through the Income Tax Assistance — Volunteer Program.

Elimination of the Additional Contribution for Subsidized Educational Childcare

Thu, 11/07/2019 - 17:23

On November 7, 2019, the Minister of Finance of Québec announced the elimination of the additional contribution for subsidized educational childcare for all families as of 2019. As a result, you will no longer receive RL-30 slips.

If you had your income tax withholdings adjusted to help pay your additional contribution when you file your income tax return, the additional amount withheld for 2019 will be used to either reduce your income tax payable or increase your refund, as applicable.

To change the adjustment, complete one of the following forms and give it to your employer:

  • Source Deductions Return (TP-1015.3-V)
  • Request to Have Additional Income Tax Withheld at Source (TP-1017-V)

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