What's new for small businesses and self-employed
On this page, you will find information on the following:
COVID-19 pandemic measures
In 2021, the Government of Canada extended several existing temporary measures and introduced new ones to help businesses and individuals during the COVID-19 pandemic. For more information on the measures, go to Canada's COVID-19 Economic Response Plan.
Government assistance programs for the self employed
You may have received federal, provincial, or territorial government program assistance that was provided for self employed individuals, businesses, farmers, or fishers. You are responsible for reporting the amount of assistance received when you file your income tax return.
Government assistance income is taxable and will either be included in business, farming or fishing income or, if you elect, will reduce your business, farming or fishing expenses. You may also have received a government loan. The loan itself is not taxable. However, any part of the loan that is forgivable is taxable in the year in which the loan is received.
Examples of government assistance programs:
Canada Emergency Wage Subsidy (CEWS) – A subsidy for the eligible remuneration paid by an eligible employer, for each of its eligible employees. For more information on rates and maximum amounts, go to Canada Emergency Wage Subsidy.
Canada Emergency Rent Subsidy (CERS) – A rent and mortgage subsidy, available directly to tenants and property owners, for a portion of eligible expenses to qualifying businesses, charities and non-profits. For more information on rates and maximum amounts, go to Canada Emergency Rent Subsidy.
Mandatory Isolation Support for Temporary Foreign Workers Program (MISTFWP) – Support available to Canadian employers to assist with the incidental costs associated with the mandatory 14-day isolation period or the mandatory 3-day hotel quarantine. For more information on amounts and application periods, go to Mandatory Isolation Support for Temporary Foreign Workers Program.
Canada Recovery Hiring Program (CRHP) – A subsidy available to eligible employers and equal to the incremental remuneration paid by an eligible employer, multiplied by a fixed subsidy rate. For more information on rates and maximum amounts, go to Canada Recovery Hiring Program.
Fish Harvester Benefit and Grant Program – Financial support available to Canadian self employed fish harvesters who were not eligible for other financial relief programs and were impacted by COVID-19. For more information go to Fisheries programs and initiatives.
For more information, go to Changes to taxes and benefits.
Capital cost allowance for clean energy equipment
The legislation for the following measure was not finalized at the time that this page was published. When the legislation is finalized, the CRA will republish electronically any revised guides at Forms. If you file your return before the revised guides are available, you may need to change your return.
To support investment in clean technologies, the capital cost allowance (CCA) Classes 43.1 and 43.2 would be expanded by:
- including new types of property (for example, pumped hydroelectric storage equipment)
- broadening eligibility for certain existing property types (for example, ground source heat pump systems)
This would apply to property that is acquired and that becomes available for use after April 18, 2021, where it has not been used or acquired for use for any purpose before April 19, 2021.
Also, for property that becomes available for use after 2024, access to Classes 43.1 and 43.2 for certain emission producing properties would be restricted by:
- removing some that are currently included in these classes (for example, fossil fuelled cogeneration systems)
- narrowing eligibility for others (for example, producer gas generating equipment)
Return of Fuel Charge Proceeds to Farmers Tax Credit
Beginning in 2021, the Government of Canada proposes 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 Ontario, Manitoba, Saskatchewan and Alberta.
Eligible farming businesses include self-employed farmers and partners in farming partnerships that actively engage in either the management of or daily activities related to the earning of income from farming and incur total farming expenses for all businesses of $25,000 or more, which are all or partially attributable to designated provinces.
To calculate their credit, self-employed farmers or partners in a partnership who operate a farming business should fill in the new Form T2043, Return of Fuel Charge Proceeds to Farmers Tax Credit.
For more information on how to report this credit, see Line 9600 – Other income and Return of Fuel Charge Proceeds to Farmers Tax Credit allocated to you in the year – Amount 5B
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