Tax Extension Deadlines: Should they be Permanent?

Beth Graddon

Tax professionals typically take the stance that Canadians should file their taxes ASAP, especially to get a tax refund, qualify for refundable tax credits and reduce interest costs on balances due.   But an interesting phenomenon occurred in our last poll, when we asked: “Do you like the federal government’s tax filing and balance due extensions to June 1 and September 1, respectively?”

 The results of our April poll show that the majority felt it was the right move, but that these extensions still aren’t long enough due to the challenges taxpayers, professionals, and CRA reps alike continue to face due to the pandemic.

In fact, 76% of the 565 responses said “yes”, while 24% said “no”. However, the comments show that with all the complex issues at play, opinions aren’t so black and white. Many did praise the government for the efforts made, and others pointed out that there would be benefit in extending the filing deadlines permanently.

Check out some of the comments for yourself below. For more information on the COVID-19 emergency response measures, be sure to attend the Virtual CE Summit on May 13.  Eight thought leaders will unpack the important details you need to know about providing advice on tax and financial objectives during the pandemic.  It’s a live online event that includes a comprehensive certificate course by e-learning. Enrol by May 11!

“Do you like the federal government’s tax filing and balance due extensions to June 1 and September 1, respectively?”

Payment due extension is a ‘yes’.  “Yes, and no.  I agree with the payment due date extension, but not the tax filing extension. They still have to be filed, and people who get refunds could really use them sooner rather than later. Plus, the CRA is already saying that delaying filing could also delay payment of your GST, Trillium and Child Tax Benefits due to start in July. This is not to even mention how the deadline extension affects us tax preparers and our work schedules…” - Kelly

Refundable credits at risk?  “I work at our local tax clinics, preparing returns for low income Canadians. These returns are needed to ensure people receive government benefits, such as GST, Trillium and Child Tax Credits. While the current new deadline is helpful, it may not be enough. The new benefit year starts in July, but if the majority of Canadians using this clinic don’t have access right now because they are all closed, they could lose their credits come July. I think the CRA needs to consider extending the credits into the next quarter, until these most vulnerable have time to file their 2019 returns. Payment amounts can be adjusted later.” - Paul Nieuwland

Relief for tax practitioners.  “I really appreciate having the extra time to file T1’s. With my daughter home from school, we’ve transitioned to homeschooling, which takes additional time on my part. Without the extra month, I would end up filing plenty of late returns.”- Daniel Housser

The pressure’s on for CRA. “As a sole-proprietor I’m doing well with my ‘new way of doing business’ however I’m concerned the deadline is not long enough, due to tax credit calculations with the June 1 deadline. Most of my clientss’ situations don’t change from year to year (of course children grow). The CRA has a big job on their hands this year.” - CLS Income Tax Services

The comfort of a conversation missing. “I’m happy to have the extension because I don’t think I would have been able to complete the returns on time otherwise.  It has been very challenging on two fronts.  As many others have stated, it is difficult getting signatures from seniors who do not deal with things electronically. On the other front is my time. Throughout the period of daily press releases announcing programs the implementation of programs, I spent the vast majority of the day on the phone advising clients on what they qualify for and how they need to apply.  And yes, I did send it out as an email blast, but the clients want the comfort of a conversation which means less time to spend preparing returns.” - Sue

How about August 31 instead of June 1?  “This year I believe it should be even later (Aug 31, 2020) and in Ontario, the Trillium benefits continue as in the past year for at least three more months (and readjust with the October payment) as some low income taxpayers rely heavily on this. Also, the HST quarterly payment should continue in July as it has and readjust with the October payment.  I work with the CVITP program as a volunteer preparing returns for low income individuals and families and we are not able to operate at the moment due to the risk of spreading the virus and are unsure when we will be able to prepare returns for these individuals.  We expect this will continue well past June 1, 2020.” - Roberta

Kudos to the government.  “I think the government is doing a great job supporting Canadians in this rough time we are experiencing. They have reacted much faster than many other countries.  The extension is definitely a start.  As time passes it may need to be extended again.  However, I caution too many extensions.  The liability simply grows as other remittances come due. If you have the cash, then consider paying it sooner than later.  If you don’t then another extension might be warranted.  I think the government will see this and most likely offer up another extension.  We must realize that they already had the foundation if such a pandemic occurred.  Now, they are addressing each new issue or scenario as it happens. And, so they should.  Good for them.  The next time this happens, they will be even more prepared.” - Sandi Holst

Everything is taking longer now.  “We need the extension, but it may not be enough time. Everything is taking longer to prepare and get signatures before E-filing. I have always thought the CRA should change the system altogether. It could be something like the CERB application and go by birthdays. This would give preparers a steady income, CRA a steady income flow, and make filing just a year-round stream. Employers and businesses could issue Tslips based on the birthdays as well. We are in the digital age - so why not use it? Not just when there is a national situation. The RRSP contribution dates could be changed to match birthdays too. I hope CRA is going to take this time to really overhaul the tax system in Canada.” - Shirley French

Productivity is down.   “I agree with the extension, but it needs to be extended more. Productivity went down 4 - 5 times with the on-the-phone-doing-your-taxes-conversations. Contacting CRA is a lost cause. It needs to be extended again.” - Wes Zalewski

Business is down by over 60%.  “They need to be extended again. With the stay at home orders, people are not getting out to do their taxes. I have a tax preparation business and we are down over 60%.” - Connie Pettigrew

It’s not back to business at all:  these comments reflect a most common concern – the pandemic’s effects will linger longer in most areas of the country.

“There’s not going to be enough time to file all the tax returns after Covid 19 Stay Home Order. The earliest time that the order is expected to be lifted in BC is the middle of May. That only leaves us with 2 weeks to file the balance of the returns.” - Gordon Douglas

 “I believe the deadline should be extended! Many seniors, as others have said, cannot or do not want to deliver return information, for they believe they are not to go out and stay home….. which is true for the most vulnerable.” - Cathy Sebben

“No, as I feel that we will not be back up and running with an income nor capable of paying if there is an amount owing. And I feel that will be needing financial help with some needing to complete their taxes.” - Arlene Ostapowich

 “The extension is good but not long enough, seniors stuck inside cannot possibly get out to do their taxes and quite a few are not computer savvy, so email and other electronic methods do not work. I believe the CRA should review the situation and give a longer extension, September or October would be more beneficial. I have always been in advocate of having the filing deadline at the end of June or July due to many financial institutions not having information slips ready by the regular deadline.”  - Alice Manderson

“We are lucky to have such caring government.  No other government over the globe address the needs of citizens as top priority as we got in Canada.” - Youssef Khattab

“All extensions are good given the situation. We have a natural disaster that no individual or government can 100% plan for.  The government’s good intent is to get cash fast to individuals and businesses. Mistakes will be seen in hindsight. Let us not focus on that. I am trying to do my bit.  I prioritize file completion and tasks based on client’s needs. Including for seniors, families and business owners with urgent needs (for example, restaurant workers, owners).”

“I really like it.  Think it should be like this every year. I feel like I have more a balanced life.” - Elizabeth Lorenz

“Every little bit helps provided the process is not beyond the skill set of many Canadians who need the help. In situations like this, speed and simplicity count.” - Maxy Ojukwu

 “It’s a good first step, we can always change it if we have to.” - Malcolm F Palmer

“I have always felt that with the Canadian population acquiring more and more wealth, that the April 20 deadline for personal tax return needed to be extended to May 31 at the minimum.  It is simply too much work that accountants must do in only two months (March and April).  So, the June 1 extension, in my view is much better. Having to pay by August 31 is respectable, but I am sure that it may not be enough time for some tax filers.” - Gaetan Ladouceur

And now to those who have some real misgivings: “The extension’s dates were ill-considered on two fronts. First: almost every person with whom I have spoken has misunderstood the date to be the end of June and thinks there is a two-month extension (when there’s only one month). It would have been much clearer if CRA (and MRQ) had stated the date was 31 May, with a submission date of 1 June (just as when 30 April falls on a weekend).  This would have made the one-month extension much clearer. Second: As a tax specialist who has 90% of files held by seniors who are 75 and older, it is impossible to reach these people (they prefer to paper-file and have no internet access) as they are residents in senior apartments or senior care facilities. They expect a personal visit both to collect material and to return it. At this time, these living facilities are not allowing any sort of outside access. I do agree that there should be an extension, but CRA (and MRQ) should have encouraged people to file in a timely fashion regardless of extension date.  At the same time CRA (and MRQ) should have made both the submission and payment date 30 September for those who simply cannot get it done for whatever reason.” - E. Pearse

“I do not like the deadline extension to file. We were able to get it done in the past and will now rush to complete on May 31. It is human nature to procrastinate.” - Terry

 “Mixed feelings. Consideration should be given to a more flexible plan.” - Cecily Gittens

And the last word goes to Evan Morrison.

 “The extensions seem fine for the moment but truly depends on when we start to get back to normal.        

We certainly hope that will be soon.  Thank you to everyone for weighing in on this important question.  This month, please let us know what you think about this issue: “In your opinion, have governments effectively interpreted the financial effect of the pandemic on small business in Canada?”

Additional educational resources:

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