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New self-identification form for the 10% Temporary Wage Subsidy
The Canada Revenue Agency (CRA) recognizes that businesses continue to be affected by the outbreak of COVID-19. Over the last few months, the Government of Canada has announced robust economic measures to support Canadian businesses through this fiscal crisis and the CRA is committed in helping them by reducing the burden in meeting their tax obligations during this critical time period.
On March 25, 2020, the federal government announced a 10% Temporary Wage Subsidy for Employers (TWS) relief program in response to the COVID-19 pandemic. The TWS was a three-month measure that allows eligible employers to reduce the payroll deductions they need to remit to the CRA. This only applies to the federal, provincial, or territorial income tax portion of the remittance. It is equal to 10% or less of the remuneration employers paid from March 18 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer.
Notifying the CRA
The new Form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers is now available. It is to be completed by all employers who are eligible for the 10% TWS. The information in this form enables the CRA to reconcile the TWS on your payroll program (RP) account, ensuring employers do not receive a discrepancy notice at the end of the year.
There are two ways to complete and submit Form PD27:
1. Complete and submit the web form through My Business Account.
2. Complete and submit the PDF or fillable PDF;
a. through My Business Account using the “Submit documents” feature; or
b. by mail or fax to any National Verification and Collections Centre.
Interaction with the Canada Emergency Wage Subsidy
You may be eligible for both the TWS and the Canada Emergency Wage Subsidy (CEWS). Employers who are eligible for both subsidies can only claim a maximum cumulative subsidy of 75% of the eligible remuneration that they pay. Therefore, if you are eligible for both subsidies, you must reduce your CEWS claim by all amounts you claim under the TWS for the pay dates in a specific CEWS claim period.
However, if you only want to claim the CEWS for a specific period, you may elect for the 10% TWS to be equal to 0% of the remuneration you pay for that period.
Employers who are eligible and take advantage of the TWS or the CEWS should complete and submit Form PD27 to the CRA to avoid a discrepancy on their payroll account. However, the CRA does not need a completed form if eligible employers do not participate in the TWS and the CEWS.
Need more information?
The CRA has a number of resources to assist in understanding the COVID-19 relief measures available to employers. For more information on the TWS, please visit canada.ca/temporary-wage-subsidy. For more information on all COVID-19 relief measures, please visit the COVID-19 Benefits, Credits and Support web page on canada.ca.
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