Tax Filing Archives - J-MAK CPA

Filing T3010 – Why Should A Charity Bother?

Admin — Wed, 11 Nov 2020 21:02:00 +0000

You may be doing the phenomenal job of running a charity. With so much to do, you may fall behind on the requirement to file form T3010 with CRA. So, is that a big deal? Sadly yes!

In Canada, a registered charity does not have to pay income tax. It is, however, required to submit the T3010 Registered Charity Information Return to CRA every year.

Due Date for Filing T3010

It is mandatory for a charity to file T3010 within six months of the end of its fiscal year. For example, if your charity’s fiscal year-end is March 31, it should file T3010 by September 30.

Please note that, as a COVID-relief measure, the deadline for filing T3010 has been extended to December 31, 2020 for charities that were required to file T3010 between March 18, 2020 and December 31, 2020. As such, if your charity has been filing T3010 by September 30 every year, based on its fiscal year-end of March 31, it can avail the extended deadline for filing T3010 by December 31 of this year.

Why File T3010?

There are multiple reasons for filing T3010. Let’s have a quick look at some of them.

1. It’s a legal requirement under the Canadian Income Tax Act for a charity to file T3010. You would not want to be non-compliant with the law.

2. In case you are unable to file T3010 by the due date, you are at risk of losing the charitable status. As per CRA, failure to file T3010 is the most common reason for revocation of charity registration.

If a charity’s registration is cancelled, it loses the privileges associated with the charitable status. Upon revocation, the organization is no longer able to claim income tax exemption as a registered charity, issue donation tax receipts, obtain rebate for GST/HST payments or claim refund of property taxes (in Ontario only). It also becomes disqualified for government grants available to registered charities. There is also the reputational risk to consider since the name of charity and the reason for revocation of its registration are publicly available on the CRA website.

If you apply for re-registration of your charity, you have to pay a late filing penalty of $500 as well as file the missing T3010s with CRA (so much for not filing them in the first place!). Re-registering as a charity usually involves more hard work than the initial registration. You will need to submit the registration application and all supporting documents to CRA, in compliance with the regulations currently in place. Very often, this requires changing the former objects and activities of the charity to meet the current CRA requirements.

Despite your best efforts, you may not be able to re-register. If a former charity is not re-registered within one year of revocation, it will be required to donate its assets to another charity. Otherwise, it will have to pay a revocation tax at 100% of the market value of its property remaining after payment of its liabilities.

3. Besides the compliance requirements, filing T3010 has an upside for charities. Details from T3010 are publicly available on CRA’s website. From here, donors can access a charity’s information and make informed funding decisions. In fact, information from T3010s across the charitable sector is collated by organizations like CanadaHelps to provide a central platform where donors can read about different charities, compare their performance and accordingly give to the charity of their choice.

4. Filing T3010 is so much more than disclosing the charity’s financial information. It gives you the opportunity to make a pitch to prospective donors and educate your supporters, the media and other stakeholders by describing the charity’s ongoing and new programs in relevant section of T3010. So, if you have not filed T3010 or not doing a good enough job in filling in its various sections, you are missing out on fundraising opportunities.

How to File T3010?

Since June 1, 2019, charities can file T3010 using online services of CRA. Otherwise, the paper option remains whereby you can mail the completed charity return to the Charities Directorate of CRA.

Along with filing T3010, you have to prepare and submit the charity’s financial statements (even if the charity was not active during the year) and details of the charity’s directors/trustees and its officers. If the charity’s income for the year is over $250,000, CRA recommends that audited financial statements should be submitted. Other forms may also be applicable, as the case may be, including provincial annual returns. If the charity is a corporation, there is no need to file the T2 corporate tax return for as long as it has charitable status.

Things to Keep in Mind While Filing Charity Return

For your convenience, here are certain aspects to bear in mind while filing T3010.

Mark the due date and be sure not to miss it
Prepare a complete return, including all applicable forms
Include financial statements (audited, if applicable) for the same fiscal year as the T3010
Provide details of directors, trustees and officers of the charity
Describe charitable activities that are current and relevant
Where applicable, include registration number of qualified donees
Ensure that the return has been signed
Remember to file the charity return even if the charity was inactive during the year

We are a CPA firm in downtown Toronto that provides tax, accounting, corporate and advisory services to businesses. We would be happy to answer any questions that you may have.

The post Filing T3010 – Why Should A Charity Bother? appeared first on J-MAK CPA.

Tax Payment and Filing Due Dates Extended + Relief Measures Announced for Individuals

Admin — Wed, 18 Mar 2020 20:49:00 +0000

The Coronavirus pandemic has impacted everyone across Canada, with some affected more severely than the others. The Government has recently announced a range of relief measures in a bid to alleviate the financial distress of Canadians at large and particularly those individuals who find themselves jobless or on reduced work hours as well as vulnerable groups.

Key support measures under Canada’s COVID-19 Economic Response Plan are noted below.

Extending the due date for payment of income tax

Taxpayers have been allowed to defer, until August 31, 2020, the payment of any Part I income tax that becomes due between March 18, 2020 and before September 2020. CRA will not charge interest or penalties on unpaid amounts of tax due over this period.

Extending the due date for filing of income tax returns

Individuals (other than trusts) may file their 2019 income tax returns by June 1, 2020 instead of the usual deadline of April 30. Please note that the tax filing deadline for sole proprietors remains unchanged at June 15, 2020.

Regardless of the flexibility to delay the filing of income tax return, the Government is encouraging individuals who expect to receive benefits under the GST credit or the Canada Child Benefit (CCB) to promptly file their returns to ensure their entitlements for the 2020-21 benefit year are determined in time. These individuals can still avail the extension in payment of taxes by August 31, 2020.

For trusts with taxation year ended on December 31, 2019, the tax return filing due date will be deferred until May 1, 2020.

Mortgage payment deferrals

Canada’s large banks have confirmed that they will provide up to a 6-month payment deferral for mortgages, on a case to case basis. Homeowners facing financial difficulties can also defer payments on mortgage loans insured by the Canada Mortgage and Housing Corporation (CMHC). Other tools available to homeowners are loan re-amortization, capitalization of outstanding interest arrears, and special payment arrangements.

Introducing the Emergency Support Benefit

The Government has announced $5 billion to support individuals who lose their jobs or face reduced work hours as a result of COVID-19 and who are not eligible for EI benefits. Eligible individuals will be able to apply for the benefit starting April 2020. While additional details are not yet available, it is expected that eligible individuals may receive up to 14 weeks of support at a level comparable to the EI benefits program.

Enhancing the Work-Sharing Program

Employees who agree to work a reduced number of hours can participate in the Work-Sharing Program if their employers have suffered at least a 10% decline in business activity due to COVID-19. The maximum duration of Work-Sharing agreements has been extended to 76 weeks across Canada, over which period eligible employers and employees will agree to a reduction in working hours (by at least 10% and up to a maximum of 60%) while income support will be provided to employees by Service Canada.

Making it easier to obtain EI sickness benefits

The Government has waived the requirements for a medical certificate as well as the one-week waiting period for individuals claiming EI sickness benefits if they are in imposed quarantine. The employees can now claim EI sickness benefits for the entire period of absence while they are in quarantine, up to a maximum of 15 weeks.

Introducing the Emergency Care Benefit

Income support of up to $900 bi-weekly, for up to 15 weeks, will be provided to:

Employees and the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits
Employees and the self-employed, who are taking care of a family member sick with COVID-19 but who do not quality for EI sickness benefits
Parents with children at home due to school closures and who are unable to earn employment income, irrespective of whether they qualify for EI or not

Eligible individuals will be able to apply for the benefit starting April 2020.

Providing additional income to qualifying individuals and families

Additional financial help is proposed to be provided to:

Low-income families through a one-time top-up to GST credit payment by early May 2020. It is expected that close to $400 will be disbursed to qualifying single individuals and close to $600 to couples
Families with children, by giving them an additional $300 per child in CCB amounts for the 2019-20 benefit year. The additional payment is expected by May 2020

Placing interest-free moratorium on student loans

Individuals currently in the process of repaying Canada Student Loans can avail a six-month interest-free suspension in loan repayment.

Protecting retirement savings

The Government has reduced by 25% the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) for 2020. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan. This will help to protect retirement savings in times of volatile market conditions.

Making it easier for banks to lend to consumers

As a concerted effort, the banking regulator and the central bank have introduced measures that will allow Canada’s large banks to inject $300 billion of additional lending into the economy at lower interest rates. These measures are designed to provide Canadians with easier and cheaper access to financing. The government is also putting in place actions to provide long-term stable funding to banks and mortgage lenders, so that they can continue to provide lending to businesses and households. Canadian banks have confirmed their commitment to provide flexible solutions, on a case-by-case basis, to individuals facing financial hardships, such as pay disruption, childcare disruption, or illness.

Please feel free to reach out to us if you have any questions in these uncertain times.

If you are interested in knowing about relief measures introduced for businesses, you can find details here.

Best regards,

J-MAK CPA Team

We are a CPA firm in downtown Toronto that provides tax, accounting, corporate and advisory services to businesses. We would be happy to answer any questions that you may have.

The post Tax Payment and Filing Due Dates Extended + Relief Measures Announced for Individuals appeared first on J-MAK CPA.