COVID-19 Interest Relief for Personal Taxpayers – But Penalties Still Apply! Under normal circumstances, CRA will be begin charging compound daily interest starting May 1st, 2021 on unpaid taxes owing for the 2020 tax year. However, due to COVID-19, CRA introduced temporary interest relief if all eligibility criteria listed below are met. If eligible, you will not have to pay interest on any taxes owing from your 2020 taxes until April 30, 2022 – essentially a deferral of tax payment by one year without cost. Please note that you still need to file your taxes by April 30th, 2021 to avoid paying late filing penalties. Interest relief will automatically be applied on 2020 taxes owing if all of the following conditions are met: Your total 2020 taxable income is $75,000 or lessYou have received at least one of the following COVID-19 benefits in 2020:Canada Emergency Response Benefit (CERB)Canada Emergency Student Benefit (CESB)Canada Recovery Benefit (CRB)Canada Recovery Caregiving Benefit (CRCB)Employee Insurance (EI) benefitProvincial or territorial emergency benefitsYou filed your 2020 income tax and benefit return It is important to note that this interest relief will only apply to your taxes owing on your 2020 tax return and not on previous or other amounts outstanding with the CRA. Penalty charges (such as false statement, omission or late filing) are not included as part of this interest relief. Therefore, it is crucial to file your personal tax by April 30, 2021. If you file your return late, the CRA will impose a penalty of 5% of your taxes owing and unpaid on May 1, 2021. This penalty will increase by 1% for each month filed late, up to a maximum of 12 months, i.e. an additional 17% maximum penalty on your 2020 balance owing. For individuals with business income, you have until June 15 to file your tax return and late filing penalty will not start until June 16, 2021. Filing taxes on time will save you unnecessary penalties and will ensure any benefits and credit payments that you are entitled will not be disrupted.