TAX TIP June 15, 2022, is the deadline for self-employed individuals to file their 2021 income tax and benefit return
Friday, 03 June 2022 08:00.AM
The Canada Revenue Agency (CRA) is here to support you and your business in meeting your tax obligations.
If you are a self-employed individual, or if your spouse or common-law partner is self-employed, you have until June 15, 2022, to file your 2021 income tax and benefit return.
What are my tax obligations as a self-employed individual?
If you earned self-employment income from a business that you operate yourself or with a partner, you have to report that income by filing a tax return.
When you're self-employed and you operate your business, you must pay the following:
• personal income tax
• Canada Pension Plan contributions
• Employment Insurance premiums if you are eligible and have registered to participate
Reporting your income also means that the CRA will have the most accurate information on file to determine if you are eligible for provincial and territorial tax credits and benefits, the GST/HST credit and the Canada child benefit.
Although your tax-filing deadline is June 15, 2022, your payment was due on April 30, 2022. Since April 30, 2022, fell on a Saturday, your payment was considered paid on time if we received it, or it was processed at a Canadian financial institution, on or before May 2, 2022.
If you still have not paid your taxes, we encourage you to do so as soon as you can to avoid additional interest charges on your balance owing. You can pay online in many ways:
• through your financial institution's online or telephone banking service;
• using the My Payment service. This service lets you make payments to the CRA with your Visa® Debit, Debit MasterCard®, or Interac® Online card from a participating financial institution. You can also access My Payment from My Account or the MyCRA mobile web app;
• Using My Account or the MyCRA mobile web app to:
-- set up a pre-authorized debit agreement;
-- pay an overdue amount or make instalment payments;
-- make pre-authorized payments from your Canadian chequing account to the CRA;
• by credit card or debit, PayPal, or Interac e-Transfer, through a third-party service provider.
You can also make payments in person. Options include paying:
• at any Canada Post outlet using cash or a debit card with a QR code from your remittance voucher or you can create a QR code using My Account or the MyCRA mobile web app;
• at a Canadian financial institution with a remittance voucher..
If you received federal, provincial, or territorial government COVID-19 assistance for your business, you have to include these amounts in your business income on the last day of the claim period it relates to, or reduce your expenses by the amounts you received. This includes amounts from COVID-19 assistance such as:
• Canada Emergency Wage Subsidy (CEWS)
• Canada Emergency Rent Subsidy (CERS)
• Tourism and Hospitality Recovery Program (THRP)
• Hardest-Hit Business Recovery Program (HHBRP)
• Canada Recovery Hiring Program (CRHP)
• Local Lockdown Program
If you received a government loan (such as from the Canada Emergency Business Account (CEBA) program), the loan is not taxable but you have to include in your business income any portion of the loan that is forgivable. The forgivable portion is taxable in the year in which the loan is received.
If you received benefits issued by the CRA in 2021, such as the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB), a T4A information slip should have already been mailed to you. Residents of Quebec should have received a T4A slip and a RL-1 slip.
T4A information slips from the Government of Canada for COVID-19 benefits are also available online if you are registered for My Account and have full access. To have full access to My Account, you need to enter the CRA security code we issued to you after completing the first step of the registration process.
Information from your T4A information slips, including COVID-19-related benefits, is available when you use the Auto-fill my return service in certified tax-filing software. This service automatically fills in parts of an income tax and benefit return with information that the CRA has on file. To use the service, you must be registered for My Account and have full access.
When COVID-19 benefits were paid, some tax was withheld at source. If not enough tax was withheld at source, you may have taxes owing. We understand that this payment could present significant financial difficulties. In that case, our expanded payment arrangements could work for you. This will give you more time and flexibility to repay based on your financial situation. In some circumstances, you may ask for relief from penalties and interest, and reduce the amount you owe. Go to canada.ca/penalty-interest-relief for more information.
There may be other effects to filing your tax return that are specific to a COVID-19 benefit you received or if you're a resident of Quebec.
Support for farmers
Beginning in 2021, the Government of Canada proposed a new refundable tax credit, the Return of Fuel Charge Proceeds to Farmers Tax Credit, as a means to return a portion of the fuel charge proceeds from the federal carbon pollution pricing system directly to farming businesses in provinces that do not currently have a system that meets the federal requirements. These designated provinces are Alberta, Manitoba, Ontario and Saskatchewan. The credit amount is proportional to the amount of eligible farming expenses attributable to the designated provinces. For 2021, if you are a farmer in a designated province with eligible farming expenses of $25,000 or more, you can expect to receive a credit of $1.47 per $1,000 in eligible farming expenses increasing to $1.73 in 2022.
The draft legislation that includes this credit has not yet received Parliamentary approval. We still encourage Canadians who are eligible to claim this credit by completing Form T2043, Return of Fuel Charge Proceeds to Farmers Tax Credit, and attaching it to their 2021 income tax and benefit returns.
Once the legislation has received Parliamentary approval, the CRA will process the returns with the Return of Fuel Charge Proceeds to Farmers Tax Credit.
Filing your tax return electronically
If you choose to file electronically on your own, there are a variety of NETFILE-certified software products that meet your needs. Some of the software products are free.
For the 2021 tax year, prior to filing your tax return electronically with NETFILE, you will be asked to enter an Access code after your name, date of birth, and social insurance number. This unique code can be found to the right, beneath the notice details box on the first page of your previous notice of assessment (NOA). If you are registered for My Account, you can also use Auto-fill my return in certified tax software to retrieve your NETFILE access code. Your access code will let you use information from your 2021 tax return when confirming your identity with the CRA. Your access code isn't mandatory when filing your 2021 tax return, but without it you'll have to rely on other information for authentication purposes.
Online services for businesses and self-employed individuals
The CRA has easy-to-use digital services for businesses and self-employed individuals. You can use these services to file, make payments, and get detailed information about your account.
Free tax help for small business owners and self-employed individuals
If you own a small business or are self-employed, the CRA offers free liaison officer services by phone or videoconference. Liaison officers can make it easier to file by helping you understand your tax obligations, answering your questions, and making sure you are aware of possible business deductions. For more information, go to our Free tax help for small business owners and self-employed individuals page.
Keep receipts and documents
It is important to keep complete records of the money you make and spend. Your records must give enough detail to determine the tax you owe and support any deductions or credits you are claiming. You need to keep all supporting documents as part of your records.
Sometimes the CRA reviews returns to make sure that income, deductions, and credits are properly reported. If the CRA reviews your return, having your receipts and records on hand will make it easier for you to support your claims.
More help for your business
The Canada Business App simplifies access to government services for small and medium-sized enterprises in Canada. Designed with business owners in mind, the app puts government programs and services at your fingertips. Download it from the App Store or Google Play.
More filing tips
For more tips and helpful information, check out our tax tips for self-employed individuals.
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SOURCE: Canada Revenue Agency
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