When the state of emergency was declared in March of this year, the federal government extended the usual deadlines for both the filing of individual tax returns and payment of taxes owed, for both 2019 and 2020. Sometimes those deadlines (like the deadline for filing of individual income tax returns for 2019) were put off until June, but most such deadlines were deferred until September 30. A summary of the federal individual income tax deadlines which will fall this year on September 30 is set out below.
Final payment of income taxes due for 2019
While the return for 2019 had to have been filed by June 1 (or June 15 for self-employed individuals and their spouses), payment of any income tax balance owed for 2019 is due on or before September 30. Where that payment deadline is not met, interest and penalty charges will be imposed.
As well, although the filing deadline for returns was in June, the Canada Revenue Agency (CRA) has indicated that late-filing penalties will not be imposed, as long as the required individual income tax return for 2019 is filed on or before September 30.
The payment deadline extension also applies to amounts owed with respect to final returns filed for individuals who died between January 1 and October 31, 2019. Where an individual died after October 2019 and before June 16, 2020, final payment is due by September 30, 2020, or six months after the date of death, whichever is later.
Finally, income tax balances and instalments due by trusts or corporations on or after March 18, 2020 and before September 30, 2020 are due on or before September 30.
Payment of income tax instalments for 2020
Canadian taxpayers who pay tax by quarterly instalments usually make those payments by the 15th day of March, June, September, and December.
Earlier this year, the CRA announced that the June 15 and September 15 instalment due dates would be postponed, and that both such instalment payments would be due and payable by September 30. Interest charges will not be levied where that September 30 payment deadline is met.
End of interest-free period
As part of its pandemic response, the CRA also announced that it was suspending the accumulation of interest charges on existing income tax debts effective as of April 1, 2020. That interest-free grace period ends on September 30 and the usual interest charges will once again be imposed (and begin to accumulate) as of October 1, 2020.
It is worth noting that interest on debts owed to the CRA is levied at higher than commercial rates, and that such interest charges are compounded daily, meaning that each day interest is levied on interest charges imposed on the previous day.
A full listing of the filing and payment deadlines for 2020 is provided on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html#extend.