The applications for the Canada Emergency Rent Subsidy are now available online through your CRA My Business Account and we can also submit applications through our Represent a Client access.
The CERS website has all of the information on eligibility, claim periods, eligible expenses, and calculating your subsidy amount. (CLICK HERE)
Eligibility criteria
To be eligible to receive the rent subsidy, you must meet all four of the following criteria:
1) You must meet at least one of the following conditions:
- You had a CRA business number on September 27, 2020
- You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf
- You purchased business assets of another person or partnership who meets condition 2 above, and have made an election under the special asset acquisition rules (same rule as for CEWS).
2) Are an eligible business, charity or non-profit (check the website for details)
3) Experienced a drop in revenue: There is no minimum revenue drop. The rate your revenue has dropped is used to calculate how much subsidy you receive for each period.
4) Have eligible expenses (see below)
Qualifying Property
You can apply for this subsidy if your are a qualifying renter or property owner. For each qualifying property you will need to provide the following:
- amounts you owe or have paid for all eligible expenses
- property address
- name and contact information of your
- mortgage holder if you have a mortgage on the property
- landlord if you rent the property
The application form will accept information for up to 3 properties. If you have more than 3, enter the information for the 3 properties with the highest eligible expenses.
Properties (business locations) that do qualify include any “real or immovable property” (buildings or land) in Canada that your business or organization owns or rents, and uses in the course of your ordinary business activities. Properties that do not qualify include any personal use properties (home, cottage, etc.) and any properties you own that are primarily used to earn rental income from arm’s-length parties.
Eligible Expenses
For each claim period, you can claim eligible expenses up to a maximum of:
- $75,000 per business location (base and top-up)
- $300,000 in total for all locations (including any amounts claimed by affiliated businesses)
- applies to the base subsidy only
- there is no maximum for the top-up subsidy
There are a few criteria that expenses need to meet in order to be eligible for your claims:
- Only amounts paid or payable to an arm’s-length party can be included
- The expense must be in respect of the claim period
- The expense must be paid or payable under a written agreement in place before October 9, 2020 (or a renewal on substantially similar terms or assignment of such an agreement)
**If you have not paid the amounts due for your eligible expenses yet, you must attest (confirm) that these amounts will be paid within 60 days of receiving your rent subsidy payment.
**You CANNOT claim expenses that were paid or payable to non-arm’s-length entities or for a timeframe that falls outside of the claim period you are applying for.
Calculating your subsidy amount
The calculation of your subsidy amount will require the following information:
- Monthly qualifying revenue amounts from 2020 and 2019
- Amounts you owe or have paid for all eligible expenses
- Property address
- name and contact information of your
- mortgage holder if you have a mortgage on the property, or
- landlord if you rent the property
- If your business is affiliated with other businesses or entities you will need the business number of each affiliated entity and the percentage assigned to each.
The CERS website has a calculator that will allow you to enter all of the relevant information and calculate the amount of the subsidy you are eligible for. If you haven’t already setup direct deposit with CRA, you can do so through your CRA My Business Account or your online banking.
Applying for the rent subsidy
You must apply online through My Business Account (Click here to register or login) or we can submit your application for you.
You will need to create a CERS account number (ZA number) under your business number before you can apply. This can be setup through your online My Business account or we can do this for you through our Represent a Client access to your CRA account.
Once you have the CERS account number setup, you can apply for the first claim period which is from September 27 to October 24, 2020. The second claim period, which just ended, is October 25 to November 21, 2020 and applications will open for this period on November 30, 2020. There is a filing deadline of 180 days after the end of the period.
If you are setup for direct deposit, you can receive payments within 3 – 8 days. Otherwise a cheque will take about 14 days. You can setup direct deposit through your online banking or through your CRA My Business account.
Final Thoughts
“Canada Emergency Rent Subsidy – Now available”. Since this is a brand new program there are bound to be lots of questions and unique situations that don’t clearly fit in the rules as described. As new information and interpretations become available, we will pass that on to you. If you are unsure if your business qualifies or what expenses and revenue should or should not be included, please feel free to contact us at 403-509-3290 or info@focusllp.ca.
On behalf of all of us at Focus LLP stay safe and healthy!
Glenn Fines, CPA, CGA
Partner, Focus LLP
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