Revenu Québec Infos

The Ministère des Finances has announced a new refundable tax credit to help offset the part of the increase in the cost of living that is not covered by the indexation of the tax system. To be eligible for it, you must be eligible for the solidarity tax credit for the period from July 1, 2021, to June 30, 2022, because you met the requirements on December 31, 2020.

The new credit is a lump sum of:

• $200 for an eligible individual; or
• $275 for an eligible individual living alone.

Unlike the solidarity tax credit, the new one-time credit is not reduced on the basis of your family income.

You do not have to claim the new credit. Payments will be made automatically beginning on January 24, 2022.

To receive the new credit, you must file your 2020 income tax return by December 31, 2021, or you must have been receiving last-resort financial assistance on December 31, 2020. Filing your 2020 return by December 31, 2021, is also the only way to make sure you get the full amount you are entitled to.

For more information, see information bulletin 2021-8 on the Ministère des Finances website.

To help families with high unsubsidized childcare expenses, the Ministère des Finances has announced changes to the refundable tax credit for childcare expenses. 

Increased tax credit rates

The tax credit rate brackets have been adjusted. The rates for 2021 are shown in the table below.

Family income ($) Tax credit rate (%) more than not more than - 21,000 78 21,000 37,030 75 37,030 38,400 74 38,400 39,780 73 39,780 41,135 72 41,135 42,515 71 42,515 101,490 70 101,490 or more 67 Increased expense limits

Certain childcare expense limits have been increased as of 2021.

• For a child who is under 7 at the end of the year, the limit has been increased from $9,825 to $10,400.
• For a child with a severe and prolonged impairment in mental or physical functions, the limit has been increased from $13,445 to $14,230.

Advance payments

Advance payments for 2021 will not be adjusted to reflect the changes. However, the rate and expense limit increases will be taken into account in the 2021 income tax return.

For more information, see information bulletin 2021-8 on the Ministère des Finances website. The website also has a tool for calculating the net daily cost of your childcare services.

The Ministère des Finances du Québec recently announced changes to the tax credit for the treatment of infertility to better complement the Québec health insurance plan and improve access to financial assistance for would-be parents.

The main changes are the following:

• Certain eligibility requirements have been eliminated.
• Expenses for an unlimited number of in vitro fertilization cycles are now eligible.
• Expenses paid for certain artificial insemination treatments are now eligible.

Eliminated requirements

The following three requirements no longer apply in respect of in vitro fertilization expenses paid after November 14, 2021:

• Neither you nor your spouse had a child before the start of the in vitro fertilization treatment for which the expenses were paid.
• A physician certifies that neither you nor your spouse underwent surgical sterilization by vasectomy or tubal ligation for reasons that are not strictly medical.
• The expenses are attributable to no more than a single in vitro fertilization cycle in the case of a woman age 36 or under, and to no more than two cycles in the case of a woman age 37 or over.

Artificial insemination treatments

Expenses paid after November 14, 2021, for certain artificial insemination treatments are now eligible.

To learn more about the changes, see information bulletin 2021-7 on the Ministère des Finances website.

The Act to amend the Taxation Act, the Act respecting the Québec sales tax and other provisions (S.Q. 2021, c.18) was given assent on June 4, 2021.

It sets a deadline for dealers that are large business and that made motor vehicles available to their employees or shareholders from 2018 to 2020 but did not report the QST on the resulting benefits. The deadline is October 31, 2021. Interest and penalties apply after that date.

For more information, click Use Of Courtesy Or Demonstration Vehicles.

Some tax deadlines have been suspended from March 13, 2020, to August 31, 2021, in accordance with the Act respecting mainly the implementation of certain provisions of the Budget Speech of March 10, 2020 (S.Q. 2021, c. 15).

Due to the state of health emergency declared by the government on March 13, 2020, Revenu Québec implemented measures to ease the burden on taxpayers. It also reduced its audit and collection activities to mitigate the impact that the pandemic could have on the population.

So that Revenu Québec is not deprived of its right to act when it resumes its activities, the deadlines for issuing an assessment or a determination under a tax law and collecting a tax debt have been suspended. The deadlines for requesting additional information and for replying to a preventive or mandatory disclosure have also been suspended. This means that Revenu Québec has additional time to issue reassessments and collect tax debts.

This suspension is automatic and applies solely by virtue of the law.

The suspension of deadlines applicable to an assessment or a determination also benefits taxpayers and representatives, who can request changes to their returns after what otherwise would have been the prescribed deadline.

As part of the federal budget delivered on April 19, 2021, the federal Minister of Finance tabled a Notice of Ways and Means to amend the Excise Tax Act and adjust the federal proposals made on November 30, 2020, concerning the application of the goods and services tax (GST) and harmonized sales tax (HST) to e-commerce supplies.

As the Québec sales tax (QST) system is generally harmonized with the GST/HST system, the new e-commerce rules will be incorporated into the QST system, taking into account the particularities of the QST and the provincial context in which it operates.

For more information, see An Act to amend the Taxation Act, the Act respecting the Québec sales tax and other provisions.

Application date

The new measures come into effect on July 1, 2021.

Although the proposed amendments require parliamentary assent, Revenu Québec will administer them in accordance with the federal bill and Québec legislation, as per its usual practices.

Simplified QST registration

The general QST registration process is more complex than the specified registration process for suppliers outside Québec. Because of the harmonization of the QST system with the federal proposals made on November 30, 2020, some non-resident businesses and platform operators will have to register under the general QST system rather than the specified registration system.

To make it easier for suppliers subject to the new obligations to register under the general QST system, a simplified registration process will be offered. Suppliers that are registered under the general GST/HST system will not have to provide prescribed information again.

After providing their GST/HST number, suppliers will be relieved of their obligation to provide certain prescribed information already provided to the Canada Revenue Agency and will then be able to register with Revenu Québec by providing minimal information. This will simplify the process of registering under the general QST system while giving Revenu Québec the assurance that it has all the information it needs to proceed with the registration.

More details on the simplified registration process will follow shortly.

Administration and compliance

Similar to the model announced in the 2018-2019 budget speech, where the specified registration system was introduced, Revenu Québec will once again adopt a practical approach to compliance for businesses and platform operators affected by the new e-commerce provisions.

Revenu Québec will work closely with businesses and platform operators for 12 months after the new provisions come into effect to help them meet their obligations. If they demonstrate that they have taken reasonable measures but are unable to comply with their new obligations for operational reasons, Revenu Québec will provide assistance and exercise its discretion in administering the measures.

After the 12-month period, the penalties provided for in existing tax legislation will be applied to businesses and platform operators that do not comply with the new obligations.

Employers with an establishment in Québec that qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period in respect of an employee who is on paid leave because of the COVID-19 pandemic.

On April 19, 2021, the CEWS (for an employee on paid leave) was extended until August 28, 2021. As a result, the credit for contributions to the health services fund has also been extended until August 28, 2021. The qualifying periods for the credit for contributions to the health services fund are the same as those for the CEWS for an employee on paid leave, with the first period beginning on March 15, 2020, and the last period ending on August 28, 2021.

For more information about the extension, see Information Bulletin 2021-4 published by the Ministère des Finances.

For information about the credit for contributions to the health services fund, see the Guide to Filing the RL-1 Summary: Summary of Source Deductions and Employer Contributions (RLZ-1.S.G-V) and the COVID-19: FAQ for Employers.

Increase in the small business deduction rate

A Canadian-controlled private corporation can, under certain conditions, benefit from a reduced tax rate for a taxation year. This measure, known as the small business deduction (SBD), applies to the first $500,000 of annual income from an eligible business that the corporation operates in Canada.

For a qualifying corporation whose taxation year ends after March 25, 2021, the maximum SBD rate for the first $500,000 of annual income increased from 7.5% to 8.3%. Consequently, a minimum tax rate of 3.2% applies to the corporation's income that entitles it to the SBD.

Option for the number of remunerated hours

To fully benefit from the SBD, a corporation has to meet an eligibility requirement with respect to the number of remunerated hours of its employees or to the proportion of activities in the primary and manufacturing sectors.

A corporation meets the eligibility requirement with respect to the number of remunerated hours and can benefit from the highest SBD rate for a taxation year if it meets either of the following conditions:

• The remunerated hours of its employees totalled at least 5,500 hours for the taxation year.
• The remunerated hours of its employees and those of the corporations with which it is associated totalled at least 5,500 hours for the previous taxation year.

As stated in Information Bulletin 2020-9 published by the Ministère des Finances, the calculation of the remunerated hours of a corporation's employees has been adjusted to take into account the exceptional circumstances caused by the COVID-19 pandemic. Accordingly, if all or part of a corporation's taxation year falls within the period from March 15 to June 29, 2020, that number of hours is deemed to be equal to the number of remunerated hours of the corporation's employees for the year multiplied by the ratio of 365 to the number of days in the taxation year that are not included in the period.

The adjustment, adapted as required, also applies to the calculation of the number of remunerated hours of a partnership's employees for a fiscal period. This calculation takes into account the number of days in the fiscal period that are included in the period from March 15 to June 29, 2020.

A corporation also has an additional option with respect to the number of remunerated hours of its employees for a taxation year that ends after June 30, 2020, but before July 1, 2021. To determine its eligibility for the SBD or its SBD rate for that year, the corporation can apply to the Minister of Revenue to have the number of remunerated hours of its employees for the year correspond to the number of remunerated hours used to determine its eligibility for the SBD or its SBD rate for the previous taxation year. The corporation can apply in its income tax return or in a separate request if its income tax return is already filed.

A corporation that is a member of a partnership can exercise the same option and use the number of remunerated hours of the employees of the partnership for the previous fiscal period to determine if its share of the partnership's income for a taxation year entitles it to the SBD. The corporation can exercise the option for a taxation year in which the partnership's fiscal period ends, after June 30, 2020, but before July 1, 2021.

Employers with an establishment in Québec that qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period in respect of an employee who is on paid leave because of the COVID-19 pandemic.

On March 3, 2021, the CEWS was extended until June 5, 2021. As a result, the credit for contributions to the health services fund has also been extended until June 5, 2021. The qualifying periods for the credit for contributions to the health services fund are the same as those for the CEWS, with the first period beginning on March 15, 2020, and the last period ending on June 5, 2021.

For more information about the extension, see the document entitled Additional Information published by the Ministère des Finances with the 2021-2022 budget.

For information about the credit for contributions to the health services fund, see the Guide to Filing the RL-1 Summary: Summary of Source Deductions and Employer Contributions (RLZ-1.S.G-V) and the COVID-19: FAQ for Employers.

As announced by the Ministère des Finances, individuals who incurred childcare expenses while receiving any of the following may be eligible for the tax credit for childcare expenses:

• Employment Insurance benefits;
• the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB) or the Canada Recovery Caregiving Benefit (CRCB).

For more information, see information bulletin 2021-01 on the Ministère des Finances website.

This change concerns only the 2020 and 2021 taxation years.

On January 1, 2021, new rules came into effect for contestations in tax matters before the Small Claims Division of the Court of Québec. Under them:

• The minimums for filing a contestation are increased. For example, a contestation can be filed with the Small Claims Division to reduce, by up to $15,000 (excluding applicable interest and penalties), the amount of income tax payable shown on a notice of assessment. Prior to January 1, 2021, the minimum was $4,000.
• Persons other than individuals can file a contestation with the Small Claims Division if they had 10 or fewer employees throughout the 12 months preceding the day on which the contestation was filed.
• Disputes can be submitted to mediation at no additional cost if the parties consent.
• Individuals who are unable to represent themselves because of some encumbrance can be represented for free by their spouse or by a relative, a friend or a person connected by marriage or civil union.
• Revenu Québec has 90 days from the date the office of the Small Claims Division receives a contestation to file with the office and notify to the person a memorandum setting out the grounds of defence and the exhibits in support of [the contentions of] the defence. Revenu Québec must also specify whether it intends to submit the dispute to mediation.
• The court can take the case management measures it sees fit at any time in the course of the proceeding.  

Contact us

Many disputes are caused by miscommunication or a lack of information. That is why we encourage you to contact us or the person named on the document you received from us so that we can discuss your file before you exercise your recourse. Most problems can be solved in writing or over the phone. If, after contacting us, you are still are not satisfied with how your file is being handled, you can exercise your recourse options, making sure to respect the legal deadlines. For more about your recourse options, see IN-106-V, Recourse for Your Tax-Related Problems.

Learn more

To find out more about contestations, see sections 22 to 34 of Bill 41 on the Publications du Québec website or our own COM-332-V, Information on Judicial Recourse.

Employers with an establishment in Québec that qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period in respect of an employee who is on paid leave because of the COVID-19 pandemic.

On November 30, 2020, the CEWS was extended until March 13, 2021. As a result, the credit for contributions to the health services fund has also been extended until March 13, 2021. The qualifying periods for the credit for contributions to the health services fund are the same as those for the CEWS, with the first period beginning on March 15, 2020, and the last period ending on March 13, 2021.

For more information about the extension, see information bulletin 2020-15, published by the Ministère des Finances.

For information about the credit for contributions to the health services fund, see the Guide to Filing the RL-1 Summary: Summary of Source Deductions and Employer Contributions (RLZ-1.S.G-V) and the COVID-19: FAQ for Employers.

To receive a refundable tax credit and certain non-refundable tax credits for businesses for a given taxation year, a taxpayer must send us the prescribed form related to the tax credit by the latest of the following dates:

• the date 12 months after the income tax return filing deadline for the taxation year;
• the date three months after the issue date of any certificate required to claim the tax credit for the taxation year.

Similarly, if a taxpayer wants to deduct an expenditure incurred for scientific research and experimental development for a given taxation year, the taxpayer must file form RD-222-V, Deduction Respecting Scientific Research and Experimental Development Expenditures, no later than 12 months after the income tax return filing deadline for the taxation year.

Discretionary power has been granted to the Minister of Revenue to extend the deadline for taxpayers to file the prescribed form. The Minister will exercise this power, under exceptional circumstances and when there are reasonable grounds to do so.

Usual filing deadline ending after March 16, 2019

If the usual deadline ends after:

• March 16, 2020, the extended filing deadline is 12 months after the usual deadline;
• March 16, 2019, but before March 17, 2020, the extended deadline is November 30, 2020.

To take advantage of the extension, taxpayers must send us the following documents by the deadline:

• a written request setting out the facts and reasons why the taxpayer could not meet the usual filing deadline, such as an exceptional situation (see note below);
• the prescribed form;
• any document from an organization that is needed to apply for the tax credit.

The documents must be mailed to the following address:

Direction principale de la vérification des activités centralisées
Revenu Québec
Complexe Desjardins, secteur D166DP
C. P. 3000, succursale Place-Desjardins
Montréal (Québec)  H5B 1A4

They can also be faxed to 514 285-3859.

The Minister's decision on whether to extend the usual filing deadline cannot be objected to or appealed. However, if the taxpayer is dissatisfied with the decision, the taxpayer can request a review by sending us a letter setting out why the taxpayer believes the decision is unfair or ill-founded. The letter must be sent to the address above.

NoteDue to the COVID-19 pandemic, which is an exceptional situation covered by the Minister's new discretionary power, a relief measure has been put in place if the usual deadline to file the prescribed form ends after March 16, 2020, but before December 31, 2020. In this case, the taxpayer is not required to send us the written request mentioned above if it sends the other two documents by December 31, 2020. Usual filing deadline ending before March 17, 2019

The Minister could also grant the taxpayer an additional extension ending on November 30, 2020, to file the prescribed form if the usual deadline ends before March 17, 2019, and certain conditions are met.

Additional information

For more information, see information bulletin 2020-8 on the Ministère des Finances website and the “Other measures” section on the Relief Measures for Individuals and Businesses page.

Employers with an establishment in Québec that qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period.

The CEWS was initially granted for a 12-week period (March 15 to June 6, 2020). On May 15, 2020, it was extended until August 29, 2020. The credit for contributions to the health services fund was also extended through August 29, 2020.

On July 17, 2020, the CEWS was extended again, this time until November 21, 2020. As a result, the credit for contributions to the health services fund has also been extended until November 21, 2020. The qualifying periods for the credit for contributions to the health services fund are the same as those for the CEWS.

For more information about the extension, see information bulletin 2020-11, published by the Ministère des Finances.

For information about the credit for contributions to the health services fund, click Credit for Contributions to the Health Services Fund in Respect of Employees on Paid Leave Due to the COVID-19 Pandemic or consult the FAQ for businesses.

A Canadian-controlled private corporation can, under certain conditions, benefit from a reduced income tax rate for its taxation year. This measure is called the “small business deduction” (SBD) and applies to the first income bracket of an eligible business operated by the corporation in Canada.

A corporation may not be entitled to the SBD or may be required to use a reduced rate in the calculation of the SBD if it does not meet certain eligibility requirements with respect to the number of remunerated hours of its employees and the proportion of activities in the primary and manufacturing sectors.

A corporation can use the highest rate to calculate the SBD for a taxation year if it meets one of the following two conditions:

• For the taxation year, the remunerated hours of its employees totalled at least 5,500 hours.
• For the preceding taxation year, the remunerated hours of its employees and those of the corporations with which it is associated totalled at least 5,500 hours.

However, given the exceptional COVID-19 health crisis, the calculation of the remunerated hours of a corporation's employees has been adjusted. Therefore, if all or part of the corporation's taxation year is included in the period from March 15 to June 29, 2020, the number of hours for the taxation year is deemed to be equal to the result of the following calculation: the number of remunerated hours of the corporation's employees for the taxation year multiplied by the ratio of 365 to the number of days in the taxation year that are not included in the period.

The adjustment does not apply to the number of remunerated hours calculated for the preceding taxation year. The adjustment also applies to partnerships.

As announced by the Ministère des Finances, our interpretation of the expression “to attend a qualified educational institution” has changed for purposes of the tax credit for childcare expenses.

Courses offered by a qualified educational institution can now be taken at a distance without the need for physical presence or virtual presence at a fixed or interactive time with the professor or the class. However, virtual presence will remain mandatory for courses offered by a secondary school if physical presence is not required.

The change applies retroactively to January 1, 2020.

On March 27, 2020, the federal government and the Québec government announced that businesses had until the end of June to remit the amounts owing on their GST/HST and QST returns. This extension is ending on June 30, 2020, as planned.

We encourage businesses and self-employed people to use our online services to avoid postal delays.

If you continue to experience difficulty in remitting GST/HST and QST amounts owing, contact us to enter into a payment agreement or to apply to have your penalties and interest cancelled.

For more information see the following pages:

• Payment Agreements
• Application for Cancellation of Interest, Penalties or Charges

Employers that have an establishment in Québec and qualify for the Canada Emergency Wage Subsidy (CEWS) for a qualifying period can also claim the credit for contributions to the health services fund for the same period.

The CEWS was initially granted for a 12-week period (March 15 to June 6, 2020). However, the federal Minister of Finance announced on May 15, 2020, that it would be extended for another 12 weeks until August 29, 2020. Therefore, the period covered by the credit for contributions to the health services fund has also been extended through August 29, 2020.

For more information, see information bulletin 2020-8 on the Ministère des Finances website.

Corporations

Revenu Québec is extending the income tax return filing deadline for certain corporations to September 1, 2020.

This new relief measure is for corporations that would have otherwise been required to file their income tax return between June 1 and August 31, 2020 (corporations whose taxation year ended between November 29, 2019, and February 29, 2020).

In March 2020, Revenu Québec announced that corporations normally required to file their income tax return between March 17 and May 31, 2020, would have until June 1, 2020, to do so. The payment deadline for instalment payments and any income tax balance owing that would otherwise be due between March 17 and August 31, 2020, was extended to September 1, 2020, for both individuals and corporations.

The main deadlines for corporations given the exceptional situation caused by COVID-19 are set out in the table below.

Taxation year end date Income tax payment deadline Extended payment deadline Filing deadline Extended filing deadline Between September 17 and November 29, 2019 Between November 17, 2019, and January 31, 2020 N/A Between March 17 and May 31, 2020 June 1,  2020 Between November 30 and December 30, 2019 Between February 1 and 28, 2020 N/A Between June 1 and 30, 2020 September 1, 2020 December 31, 2019 February 29, 2020 N/A June 30, 2020 September 1, 2020 Between January 1 and 16, 2020 Between March 1 and 16, 2020 N/A Between July 1 and 16, 2020 September 1, 2020 Between January 17 and February 29, 2020 Between March 17 and April 30, 2020 September 1, 2020 Between July 17 and August 31, 2020 September 1, 2020 Between March 1 and June 30, 2020 Between May 1 and August 31,  2020 September 1, 2020 Between September 1 and December 31, 2020 N/A Trusts

Revenu Québec is extending the information return and income tax return filing deadlines for certain trusts to September 1, 2020.

This new relief measure is for trusts that would have otherwise been required to file their information return or income tax return between June 1 and August 31, 2020 (trusts whose taxation year ended between March 2 and May 31, 2020).

In March 2020, Revenu Québec announced that trusts normally required to file their information return or income tax return between March 31 and May 31, 2020, would have until June 1, 2020, to do so.

The filing deadlines for trusts given the exceptional situation caused by COVID-19 are set out in the table below.

Taxation year end date Filing deadline Extended filing deadline December 31, 2019 March 30, 2020 May 1, 2020 Between January 1 and March 1, 2020 Between March 31 and May 31, 2020 June 1, 2020 Between March 2 and May 31, 2020  Between June 1 and August 31, 2020 September 1, 2020 Between June 1 and December 31, 2020 Between September 1, 2020, and March 31, 2021 N/A

Employers that are eligible for the Canada Emergency Wage Subsidy and that have an establishment in Québec can apply for a credit for contributions to the health services fund in respect of employees on paid leave due to the COVID-19 pandemic for a period of twelve weeks, retroactive to March 15, 2020.

The amount of the credit for contributions to the health services fund will be equal to the total amount of the contribution to the health services fund paid by an employer on the salary and wages paid to employees on paid leave during a week included in the period that starts on March 15, 2020, and ends on June 6, 2020.

Employees who do not do any work during a given week but are still remunerated by their employer are considered to be on paid leave during that week.

Application for the credit for contributions to the health services fund

The application for the credit for contributions to the health services fund must be filed with Revenu Québec at the same time as the Summary of Source Deductions and Employer Contributions (RLZ-1.S-V or RLZ-1.ST-V) for 2020.

The application must be accompanied by documents and information that will help Revenu Québec determine the amount of the credit for contributions to the health services fund to which the employer is entitled.

Reduction of periodic payments of the contribution to the health services fund

Employers can reduce the amount of the periodic payment of the contribution to the health services fund they are required to remit to Revenu Québec after April 30, 2020, by the amount of the credit for contributions to the health services fund related to the salary or wages paid to employees on paid leave before the deadline for making the periodic payment, as long as that amount was not used to reduce another periodic payment.

Reduction of the contribution to the health services fund for the creation of specialized jobs

Employers that are eligible, for 2020, for both the credit for contributions to the health services fund and the reduction of the contribution to the health services fund for the creation of specialized jobs will have to deduct the portion of an employee's salary or wages used to calculate the credit for contributions to health services fund from the eligible salary or wages used to calculate the reduction of the contribution to the health services fund for the creation of specialized jobs.

For more information, see information bulletin 2020-7 published on the website of the Ministère des Finances.