KEMPTVILLE — It’s tax season and there are some changes that farmers should know about.
Fran Beach, who prepares tax returns for farmers at Sheppard & Associates in Kemptville, offered four tax reminders for farmers.
Most notably, the payback for the COVID relief loan has been extended by one year to December 31, 2023, she said.
The CEBA (Canada Emergency Business Account) is an interest-free loan of $40,000 or $60,000 to help with non-deferrable business expenses (e.g. payroll, rent, utilities, insurance, property tax). The loan includes a maximum of $20,000 that will be forgiven (not paid back). If the loan portion is not paid back by the end of 2023, the farmer will have to repay with 5 % interest.
“The key to remember from a tax perspective is that the forgivable amount is recorded in the year that you receive the funds,” Beach said.
A new tax credit was introduced at the end of December for farmers that use propane and natural gas in their operations. It’s called the Return of fuel charge proceeds to farmers tax credit but the details have not yet been determined and even the Canada Revenue Website notes that more information is coming, Beach said.
She also reminded farmers that they need to tell their tax preparer if they bought a big ticket item. There is an accelerated capital-cost allowance (CCA) that can be applied to the first year of purchase.
Fourth, farmers thinking of retiring need to get advice before selling equipment and land, especially if they have multiple properties, she said.
Here are two other things to know:
• There is no change to federal personal tax rates in 2021 but the 2021 tax brackets have been adjusted for inflation.
• The Canada Recovery Hiring Program has been extended to May 7, 2022 with a possible further extension to July 2. This program subsidizes up to 50 % of eligible salary or wages but the amount is taxable.
