June 15, 2020 is the deadline for self-employed individuals to file their 2020 income tax and benefit return
It is important to file on time if you receive COVID-19 recovery benefits such as the Canada Recovery Benefit, Canada Recovery Caregiving Benefit, or Canada Recovery Sickness Benefit. The CRA uses information from both your 2019 and 2020 returns to confirm your eligibility to receive these benefits. Filing on time avoids having your recovery benefit payments stopped while we validate your eligibility.
Who is considered self-employed?
Generally, you are a self-employed individual if any of the following apply to you:
- you carry on a trade, profession or business as a sole proprietor or an independent contractor
- you are a member of a partnership that carries on a trade or business
- you are otherwise in business for yourself (including a part-time business)
- if you participate in the platform economy, which includes economic and social activities facilitated by the use of technologies such as the Internet and mobile applications.
To determine if you are self-employed or an employee, go to CRA’s employee or self-employed webpage for more information.
What are my tax obligations as a self-employed individual?
If you earned self-employment income from a business that you operate yourself or with a partner, you have to report that income by filing a tax return. When you’re self-employed and you operate your business, you must pay the following:
- personal income tax on your net self-employed income
- Canada Pension Plan contributions on net self-employed income
- employment insurance contributions if you have registered to participate
Keep in mind that, no matter how you generate income, you have to report it on your tax return. If you don’t report your income, it can result in penalties. Reporting your income also means that the CRA will have the most accurate information on file to determine if you are eligible for provincial and territorial tax credits and benefits, the GST/HST credit and the Canada child benefit.
Online services for business and self-employed individuals
The CRA provides online services for businesses and self-employed individuals. You can use these services to file, make payments and get detailed information about your account.
Free tax help for small business owners and self-employed individuals
If you own a small business or are self-employed, the CRA offers you free liaison officer services by phone or videoconference. Liaison officers can make it easier to file by helping you understand your tax obligations, answering your questions and making sure you are aware of possible tax deductions. For more information, go to canada.ca/cra-liaison-officer.
Even if June 15, 2021 is your filing deadline, the deadline to pay any balance owing was April 30, 2021. If you cannot pay in full, contact the CRA to set up a payment arrangement to pay your balance owing over time. To learn more about your payment options, go to canada.ca/payments.
Keep receipts and documents
It is important to keep in-depth records of the money you make and spend. Your records must give enough detail to determine the tax you owe and support any deductions you are claiming. They must be supported by original documents. Sometimes the CRA reviews returns to make sure that income, deductions and credits are properly reported. If the CRA reviews your return, having your receipts and records on hand will make it easier for you to support your claims.
More filing tips
For more tips and helpful information, go to CRA’s tax tips for self-employed individuals.