The Government had rolled out its Canada Emergency Business Account (CEBA) to support small businesses due to pandemic. Since the start of the program there has been a much criticism over the “exclusion” of certain small businesses. One of the key requirements for CEBA is that a business should have T4 of minimum $20,000 for 2019. That excluded a lot of small businesses, entrepreneurs, sole proprietors and other micro businesses who usually pay through dividends.
Due to T4 requirement, and out of desperation for support, a lot of small businesses who did not have previously filed T4 rushed to file T4 information returns for 2019. Late filing of T4 does not come cheap, read here our previous post about late filing of T4s. For businesses in the similar situation, there is a good news.
Government has expanded CEBA program to include the businesses who pay through dividends only.
This post is not being updated anymore.
Update: CEBA Expanded Eligibility Program is open now (June 26, 2020)
Applications under non-deferrable expenses stream are expected to open on Friday June 19, 2020.
Update: CEBA Expanded Eligibility Program – Launch delayed
The expanded #CEBA will no longer launch tomorrow. Work continues around the clock to ensure the program can securely launch across over 230 financial institutions. We know how important the program is to small businesses & want to launch as quickly as possible. Updates to come.
— Bill Morneau (@Bill_Morneau) June 19, 2020
CEBA eligibility requirements (updated):
A detailed version of eligibility requirements can be found here.
- T4 Sum for 2019 should be between $20,000 and 1,500,000.
- If T4sum is less than $20,000 (new expanded eligibility):
- You must have filed 2018 or 2019 income tax returns.
- You should have eligible non-deferable expenses between C$40,000 and $1,500,000
- A business number with CRA
- An Active chequing/operating account with bank.
New CEBA eligibility for Sole proprietors, Entrepreneurs and Dividend-Paying-Only-Corporations
Read: What are non-deferrable expenses?
May 19, 2020 Prime Minister has announced that CEBA program is expanded to include more small businesses.
As per new announcement, small businesses who are sole proprietors, pay independent contracts rather than employees, family-owned businesses who pay through dividends only will be now eligible for the CEBA loan. More details are expected soon.
As per new eligibility, the businesses should:
- have filed their 2018 or 2019 income tax returns,
- have a bank account at a participating financial institution
- have a Canada Revenue Agency Business number
- have eligible non-deferrable expenses between $40,000 and $1.5 million (such as rent, utilities, property taxes and insurance etc)
So, if you were not meeting the CEBA requirements you might be eligible now.
For more updated information on CEBA, please follow the link. If you are looking to file your T4 Information return or Corporate income taxes (T2) you can contact us.
We shall be updating this post as soon as more details are announced, please note we do not provide any consultancy on CEBA loans to general public except to our existing clients, if you are needing more information, please contact your financial institution. Otherwise join the discussion at Facebook by clicking the following link. Due to busy tax season please do not send us direct messages. Our phone lines and direct messaging are only for the existing and potential clients.
Maroof HS CPA Professional Corporation provides a comprehensive income tax services to both individuals and businesses. If you are not up-to-date with your tax filings, you can contact us and we can help you with the same. If you are applying for other loans and your lenders have other requirements such as Notice-to-Reader financial statements or business plan we can help you with that too. Contact us today.