Canada Emergency Benefit Account (CEBA) Loans
As we come to December 31, 2023 a reminder to taxpayers that have a loan through the Canada Emergency Business Account (CEBA) program that action is required for taxpayers eligible for forgiveness. To qualify for the partial loan forgiveness ( ie. $20,000 for the $60,000 loan amount), the outstanding balance needs to be repaid on or before January 18, 2023.
About CEBA
Established in April 2020, the CEBA program offered interest-free loans of up to $60,000 to small businesses and not-for-profits. Loans were offered through more than 220 financial institutions across Canada with an original repayment date of September 14, 2023. According to the program, if eligible loan holders in good standing repaid their loan by the repayment date, they could claim forgiveness of 25% on the first $40,000 and 50% on amounts above $40,000 up to $60,000. The government announced the latest changes in September 2023 and we have provided a recap below.
September 2023 Changes
Eligible for Partial Forgiveness
The forgiveness repayment deadline has been extended from December 31, 2023, to January 18, 2024;
Loans outstanding as of January 19, 2024, will be converted to a 2-year non-amortizing term loan at 5% interest per annum;
CEBA loan holders that submit a refinancing loan application to the financial institution that provided their CEBA loan by January 18, 2024, but require a grace period to finalize the payout of their CEBA loan, can still qualify for partial loan forgiveness. For these customers, the outstanding principal of their CEBA loan, other than the amount of potential debt forgiveness, plus any applicable interest is to be repaid by March 28, 2024.
Not Eligible for Partial Forgiveness
Repayment deadline remains December 31, 2023
Any loan outstanding post the forgiveness deadline will commence collections process beginning January 2, 2024
If you have any questions, please reach out to a member of the digitaltaxCPA team, we would be happy to help.
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