congregational finances during the pandemic 9 · do those separately. tax bucket might be a...

Congregational Finances

During the Pandemic – 9

The United Church of Canada

L’Église Unie du Canada

May 20, 2020

Kendra Fry

Erik Mathiesen

Clyde Harris

A New Creed

We are not alone,

we live in God’s world.

We believe in God

who has created and is creating

who has come in Jesus

the word made flesh

to reconcile and make

new

who works in us and others

by the spirit.

We trust in God.

We are called to be the Church:

to celebrate God’s presence

to live with respect in Creation,

to love and serve others,

to seek justice and resist evil,

to proclaim Jesus, crucified and risen,

our judge and our hope.

In life, in death, in life beyond death,

God is with us.

We are not alone.

Thanks be to God.

EHM ~ The United Church of Canada

What We’ll Cover Tonight May 20

Latest news

– CEWS extended to August 29

– CEWS minor RETROACTIVE changes

– CECRA expanded to include us

TEWS interplay with CEWS

Your questions

Information is accurate as at 3:00 p.m. EDT.

Information may be affected by subsequent

announcements.


Latest news May 20

Churches now:

– eligible for CECRA rent program

– still not eligible for CEBA loans (camps are).

Would not repay a loan yet if you got one……

CEWS period to be extended thru to Aug 29. No

details yet

Insurance premiums up 30% with June renewal

Reminders:

-T3010 filing deadline extended to Dec 31, 2020

-please submit church statistics (blue forms) online

asap.


Mea Culpa

our comment about things stabilizing or slowing

down was not correct

Advice re revenue definitions is generic and reflects

our best understanding on what revenue to include

and exclude based on CRA FAQ. Document your

assumptions and be consistent.

Now suggesting that you should do the 10%

calculation as an input to the 75% calculation even if

the actual processing is being done for you.


Shout out !

None of us signed up for this additional complexity

Big Thanks to the General Council payroll team

– Angelica Benalcazar

– Eileen Dai

– Olga Saranchuk

– Ravindran Nadarajah

And to Cathy Locke and the ADP team for special

accommodations

And to Clyde Harris for helping so many navigate

getting online


CEBA Clarification

$40,000 Canada Emergency Business Account

Churches STILL NOT ELIGIBLE . Most camps will

be.

Must be incorporated and have sales revenue on line

4640 of T3010

You have to be able to certify applicant :

is not a union, charitable, religious or fraternal organization or

entity owned by such an organization or if it is, it is a registered

T2 or T3010 corporation that generates a portion of its revenue

from the sales of goods or services;


CECRA Clarification

Canadian Emergency Commercial Rent Assistance

Churches and other ministries are likely now eligible

The requirement for a mortgage has been removed,

CMHC has confirmed that not for profits are eligible.

We need to confirm the language around “rents

claimed on taxation documents for 2018 and 2019

and if the T3010 meets this standard.


CECRA – The Benefit

Canada Emergency Commercial Rent Assistance (CECRA) for

small businesses provides relief for small businesses experiencing

financial hardship due to COVID-19. It offers forgivable loans to

eligible commercial property owners to:

reduce the rent owed by their impacted small business tenants

meet operating expenses on commercial properties

Property owners must offer a minimum of a 75% rent reduction for

the months of April, May and June 2020.

- As per CMHC web at

- https://www.cmhc-schl.gc.ca/en/finance-and-

investing/covid19-cecra-small-business


https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

CECRA - Eligibility

LANDLORD ELIGIBILITY

While the program is titled “Commercial” working with the Ontario

Non Profit Network we have confirmed that Not For Profits and

Charities who have properties that collect rent from eligible small

business owners will be eligible.

Must have a legal rental or lease agreement

Must have declared rental income on their 2018 and 2019 tax

returns (currently clarifying the validity of T3010 as a tax return,

working with the Hubs Advocacy Group led by Artscape)

No longer a requirement to have a mortgage, although it is

administered via CMHC


CECRA - Eligibility

TENANT ELIGIBILITY

Tenants must prove a 70% reduction in income-

compared to last year or to Jan/Feb 2020 incomes OR

have ceased operations

Tenants regular rent must be less than 50k per month

Tenants must earn less than $20 million per annum


CECRA Process

First: Await Confirmation Regarding T3010 as proof of

rentals claimed on tax forms

Landlords to Gathering the Following Proofs:

Tenant reduction in revenue (clarification awaited)

Leases or rental agreements

Reduction or removal of rent letter with guarantee of

no evictions, signed by both parties

Application will be available via CMHC May 25th, make

application by August 31st, 2020 sign up for updates at

https://www.cmhc-schl.gc.ca/en/finance-and-

investing/covid19-cecra-small-business


https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

CECRA Process


CECRA: The Calculation

Who Pays What:

The tenants pays 25%

The provincial government pays 50%, retroactively for April,

May, June

The landlord accepts the 25% loss

Example: Tenant one pays $1,000 a month usually

With the CECRA they now pay $250, the government pays

$500 and the landlord forgives $250. This applies for three

months

If the month has passed the reduction can be applied to

future months or refunded


Canada Emergency Response Benefit

Canada Emergency Response Benefit,

(“CERB”) available to laid-off staff irrespective

of eligibility for EI.

$500/week for 16 weeks

must have earned $5,000 in 2019.

expanded to allow $1,000 income.

many part-time and contract workers will be

better off in the short term (will need ROE)


Layoff Considerations

check with your region – province-specific

employment standards to be adhered to.

hopefully less pressure if CEWS (75%) eligible

core group benefits to continue (excl LTD and RCP)

funded by the church

Arrangements can be made to keep up pension

payments

preparation of Record of Employment (ROE)

– fastest to do online at Service Canada

New webinar at United-in Learning re ROE Web

–EHM ~ The United Church of Canada

Logging into CRA Accounts or Service Canada

Sign Up for Service Canada even if ROE is not required

– It might be necessary tomorrow

– When on Service Canada choose

• Switch to CRA Account

• Access provided to My Business Account

Otherwise sign up for Represent a Client

– Check Change Owner

– Provide list of names (T1235) IF DATES CORRECT !!!

– PDF file – only four pages otherwise to large for sending

Your own income tax filings must be current to register

– Current year and one prior


Logging into CRA Accounts or Service Canada

I have suggested using the T1235 List of Officers/Directors and

Trustees when applying for access to the Business Account.

Normally this would be very beneficial, however, I am surprised at

the number of churches that enter a Start Date and an End Date as

the first and last day of the calendar year. This means that on

December 31 there are no active Officers/Directors or Trustees for

that Pastoral Charge until the T1235 is filed again with the next

T3010 form. What is really wanted here is the first day that the

person filled the role and the last day the person filled the role. In

my own case the Start Date would be way back in the 1900s and I

am told that the T1235 won’t accept any date in this field. The joys

of a congregational treasurer!

–- Clyde


United Church $10,000 Emergency Loan

intended to supplement federal funding programs and

respond to transition from them as federal programs

expire.

Special case intervention now

Online now. Application goes automatically to region

for review

eligibility to be confirmed in consultation with the

region

needs based and viability based

THANK YOU United Church Foundation!


United Church Emergency Loan

This $10,000 loan

– will be interest free if paid in full by September 30,

2021.

– if paid by September 30, 2021, $500 is forgiven for

a total repayment of $9,500.

– Interest at 2% starts to accrue on October 1, 2021

– Principal and interest will be paid within three

years from September 30, 2021.

– A payment plan will be developed with you.


Federal Government supports @May 20

May 13 and May 20 webinars are the only ones fairly

up to date. The rate of change MAY be slowing

down. Maybe?


Federal Government supports @May 20

https://www.canada.ca/en/revenue-

agency/campaigns/covid-19-update/frequently-asked-

questions-wage-subsidy-small-businesses.html

75% - you apply for it

https://www.canada.ca/en/revenue-

agency/services/subsidy/emergency-wage-subsidy.html

Excellent resource now. Be sure to read FAQ.


10% - you take it

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

10% Subsidy processing

All church payroll entities eligible for 10% wage

subsidy. Same for other ministries

1,300 pastoral charges will have the rebate

processing done for them by ADP and the national

office. (payments arriving now)

Tools available online for those who choose to do it

themselves

– Temporary Wage Subsidy worksheet

– TWSE-TA Form Managed Services


10% Subsidy processing -tools

https://www.united-church.ca/leadership/church-

administration/pastoral-charge-payroll-service

FIRST BATCH List of 1,090 pastoral charges having

the rebate processing done now. Listed at “Report

Change of Contact”

2ND Batch list coming soon

We also have an error list we are checking out

Can also wait with processing if your cashflow allows.


https://www.united-church.ca/leadership/church-administration/pastoral-charge-payroll-service

10% Subsidy processing Example 1

ONE EMPLOYEE

$60,000 salary

– $5,000 per month or $1,153.85 per week

– Income tax withheld $1,200

– Eligible subsidy is $1,375 for the 3 month period

Will take 3 monthly transactions to realize the full

subsidy entitlement because max for any pay period is

10% of monthly wages ($500)



THREE EMPLOYEES

$60,000 salary, plus two part-time at $12,000/yr

– $7,000 per month or $1,615.38 per week

– Income tax withheld still only $1,200

– Eligible subsidy is $2,100 4,125 for the 3 month

period

Will take 3 monthly transactions to realize the full

subsidy entitlement because max for any pay period is

10% of monthly wages ($700)


10% Subsidy processing MY CONCLUSION

Have this done for you by authorizing ADP/GCO if

you haven’t already

If you are doing it yourself

– On ADP no problem

– If you have employees not ADP you will need to

do those separately. Tax bucket might be a

problem. Might need to draw on ADP tax bucket.

– Put all employees on ADP for future

Note: Those qualifying for the 75% subsidy still

need to use the 10% calculator


10% Subsidy processing – COMMON ?????

Where is my money?

– Check your bank

– Could be on an exception list

What does that amount represent?

– Trust the system

Will we get a statement from ADP summarizing? YES

What amount should I use for the CEWS?

– For first period, use 10% of the wage number

Will program be extended too? Probably not.

Note: Those qualifying for the 75% subsidy still

need to use the 10% calculatorEHM ~ The United Church of Canada

Questions so far


Federal 75% (CEWS)

Eligibility

Calculating Revenues

Eligible Employees

Eligible Remuneration

Calculating the wage subsidy

Claiming the wage subsidy

Ensuring Compliance


https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html







Federal 75% (CEWS)

The CEWS will be processed at the payroll program

(RP) account level, so you will have to file a separate

application for each RP account.

Do a separate version of the CRA online calculator

and on line application for each RP#

For cases where some employees on ADP and some

not, you will need to have separate workpapers and

consolidate them for your application (depending on

whether different RP numbers)


75% CEWS processing – calculator

Calculate the values using the spreadsheet

– Download the calculation spreadsheet

– Enter the claim period (dropdown menu)

– Suggest not to use the batch entry

– Go to Weekly tab to enter each individual

• Monthly salaries x 12 / 52 = weekly salaries

• Employee at Arm’s Length must be answered

• All pay figures on a weekly basis

• All weeks must have an entry even if 0.00

• Totals transferred to Instructions and ResultsEHM ~ The United Church of Canada

75% Subsidy processing NEW May 19


Support Seasonal Employees and Employees

Returning from Extended Leave To address any

unintended outcomes in some situations, such as when employees were on

parental, disability, or unpaid leave from January 1 to March 15 of 2020, or

when individuals – whether dealing at arm’s length or non-arm’s length with

their employer – are employed on a seasonal basis, the government

proposes to amend the CEWS to allow employers to calculate baseline

remuneration for an employee as the average weekly remuneration paid to

the employee from January 1 to March 15 of 2020 or, alternatively, as the

average weekly remuneration paid to the employee from March 1 to May 31

of 2019, in both cases excluding any period of 7 or more consecutive days

without remuneration. Also, employers would be able to choose which

period to use on an employee-by employee basis.

75% CEWS processing – calculator(2)

Calculate the values using the spreadsheet

– Make note of Results shown on first tab

– go back to the web page and enter values in

Section 2c required fields

Premiums and Contributions

– 100 % refund of employer premiums and

contributions to EI and CPP. Usually zero

– Only for employees furloughed with full or partial

remuneration. (furlough means NO WORK)

– Enter in boxes EI and QPIP or CPP and QPP



To make things easier when we apply for our

75% we are asked to submit what 10% of our

wages would be. The resulting claim takes that

into consideration.

If you have not actually claimed the 10% you

can choose to claim it at a later date


75% CEWS processing – calculator

Deductions for this time period

– 10% TWS for Employers

• Assumption is made that everyone applied

– Total amount Employees received under ESDC’s

Work-Sharing benefit Program

Get results

– Calculate your total wage subsidy

– Print results page for use when applying


75% Subsidy processing – applying

Before you apply

– Business details and direct deposit must be

correct on your RP account

– Have the Results handy from the calculation of the

estimated subsidy


Federal 75% (CEWS)

There are three ways to apply all online:

– My Business Account

– Business representatives may apply using

Represent a Client. (need Level 2 or 3)

– If neither are an option for you, use the Web

Forms application with your web access code

Sign into the Web Forms application

Get a web access code (WAC) 1-800-959-5525

Hoping to have “help desk” support for next week


https://apps.cra-arc.gc.ca/ebci/ghnf/netf/prot/ntrWgSbsdyStndAln.action?request_locale=en_CA

https://apps.cra-arc.gc.ca/ebci/leb0/wacretrieve/pub/disclaimer.action?request_locale=en


Form RC661 E Attestation form to be signed by owners or

managers or senior official and keep with records

Part I – General

– The claim has been reduced by the 10% TWS

– All records and calculations must be retained for Audit

• Revenue reduction

• Employee remuneration

– Maintain records for amount of wages paid to employees

from the subsidy, and report these amounts on the

employees’ T4s and T4 Summary

– If later determined eligibility requirements not met or the

amounts were overstated, all amounts to be repaid.



Form RC661 E Attestation

Part II – CEWS Program Rules Elections

– A) Check all Elections that apply

• Box 1, 2, and 4 may apply to multipoint charges

• Box 3 deals with joint ventures and not likely to apply

• Box 5 to be checked if using the Cash method

• Box 6 concerns “prior reference period”

• Box 7 check if excluding government funding

– B) Employer has not made any of the above elections

Part III – Attestation Statements

– Enter amount from line H of application

– Sign with Title



After you apply

– On line deposits have been within 3 days

– Paper Cheques – who knows?

– For 2020 T3010

• This would be on line 4540 Schedule 6, T3010

• T4 will have an Other Information box to report

the amount of the subsidy attributed to them

– Must keep records for Audit purposes

• Fraudulent claims – return amount plus 25%

• Complete record of all assumptions


75% Subsidy processing Common ???

What wages do I use?

– All amounts taxable to the employee except if a

manse.

What number do I use for the 10% subsidy

adjustment?

– For first claim, use 10% of your CEWS wages.

They don’t care if you have claimed, they assume

you will.

What if not on ADP?

• File by RP #


Questions so far


Internal Considerations –governance

Wage subsidy applications do not require

region approval

Any loan applications REQUIRE

– congregation board approval

– region approval (perhaps expedited)

– Online application by someone authorized

to “bind the applicant”


Reconciling all this later this year

– So much happening at once

– Inevitable that there will be some duplication or

errors in claims

– Reconciliation in the fall for

• Maximization of 10% wage subsidy (max

$1,375 per employee or 10% of total wages)

• Reconciling 10% adjustment on 75%

– Keep books and records substantiating

• Eligibility calculations/determinations

• Your calculations


Summary of what you need to do for wage

subsidies– PROCESS the 10% transactions (have ADP/GCO

do or do it yourself)

– Determine your 75% subsidy eligibility and for

which periods.

– If eligible for the 75%

• Use CRA spreadsheet for overall calculations

• Use ADP/church spreadsheet for 10%

adjustment

• File online by whichever method will work

• Keep complete records for each filing


Contacts for action

ADP TEWS queries (authorization etc) [email protected]

Deferring monthly withdrawals of assessments

– [email protected]

Suspending church loan payments [email protected]

Stewardship queries [email protected]

United Church emergency loan

https://www.united-church.ca/community-faith/being-community/united-

church-emergency-support

Working on having a help desk for folks trying to registered

online. Should be available next week.


mailto:[email protected]




https://www.united-church.ca/community-faith/being-community/united-church-emergency-support

Questions and Closing


WE ARE NOT IN THE SAME BOAT …

I heard that we are all in the same boat, but it's not like that. We are in the same storm, but not in

the same boat. Your ship could be shipwrecked and mine might not be. Or vice versa.

For some, quarantine is optimal. A moment of reflection, of re-connection, easy in flip flops, with a

cocktail or coffee. For others, this is a desperate financial & family crisis.

For some that live alone, they're facing endless loneliness. While for others it is peace, rest & time

with their mother, father, sons & daughters.

With the weekly increase in unemployment, some are bringing in more money to their households

than they were working. Others are working more hours for less money, due to pay cuts or loss in

sales.

For some, not getting on with family domestic abuse is rife ... we never know what goes on behind

closed doors.

Some were concerned about getting a certain candy for Easter, while others were concerned if

there would be enough bread, milk and eggs for the weekend.

Questions and Closing


Some want to go back to work because they don't qualify for unemployment and are running out of

money. Others want to kill those who break the quarantine.

Some are home spending 2-3 hours/day helping their child with online schooling, while others are

spending 2-3 hours/day to educate their children on top of a 10-12 hour workday.

Some have experienced the near-death of the virus, some have already lost someone from it, and

some are not sure if their loved ones are going to make it. Others don't believe this is a big deal.

Some have faith in God and expect miracles during this 2020. Others say the worst is yet to come.

So, friends, we are not in the same boat. We are going through a time when our perceptions and

needs are completely different.

Each of us will emerge, in our own way, from this storm. It is very important to see beyond what is

seen at first glance. Not just looking, actually seeing.

We are all on different ships during this storm experiencing a very different journey.

Realize that ... and be kind.

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