CEWS

As Canadian businesses struggle to overcome the financial impact of Covid-19, they may experience issues with keeping their employees employed and paid. The federal government launched the Canada Emergency Wage Subsidy (CEWS) to help cover the cost of employee wages, retroactive to March 15th. This subsidy enable businesses to re-hire your workers, prevent more job losses and help you ease back into your normal business activities.

Sounds great. But what else should you know? CEWS is a taxable income to businesses and should be included in your corporate tax return (if you applied as a sole proprietor, it should be included in your business income).

CRA does expect businesses to maintain adequate books and records to support the accuracy and completeness of your claim. Supporting paperwork such as showing the calculation of the wage subsidy claimed for each eligible employee is also required. Failure to provide adequate proof that your claim is legitimate may result in penalties.

You may be required to return part of all of the subsidy if you:
Cancel an application Amend a previous application Found calculation errors for a claim period Find out you do not qualify for the subsidy after a payment is received Received a notice from CRA stating that after a review, your claim has been denied or reduced The returned subsidy may be subject to interest.

Got more questions about CEWS? Contact Us.