These “guidelines” so to speak must be written by people who have little understanding of double entry accounting, real life situations, or just can’t think far enough in advance to determine how their policies will actually affect things. If they really wanted to handle this properly they would have spent some time and effort while “working from home” to come up with a design to properly report things such as covid assistance or how the reduced source deductions due to TWS and PD27 would flow into the T4 Summary.
The problem you get into with simply putting an amount on line 295 (general dumping ground for other additions to income) is how would you account for this in the financial statements without it causing more problems? If the assistance is monetary (a deposit to your bank account) what would be the offsetting entry? How would you balance the schedule 100 and schedule 125 for this “covid assistance”? If you account for it as income in the financial statements you are also going to need to take some type of deduction for this amount on the Schedule 1. Now you will end up with an addition on line 295 for Covid subsidies and what? a deduction on line 395 for the same amount of Covid subsidy because it was reported in the financial statements?
If not income on the financial statements or the Schedule 125 I’m sure the CRA wouldn’t be terribly impressed if the journal entry for Covid payments was a debit to bank and a credit to shareholder’s loan. As far as the schedule 125 goes… in my limited experience with this schedule… as far as I know, the only source of income you can report on the Schedule 125 that doesn’t show up as taxable income is something like 9980.
Although incorrect according to the instructions on the T2-GIFI that @Don-Murray pointed out… I can’t see any way that isn’t messy to account for the money ending up in the corporation’s bank account.
If they are going to suggest something like this they need to think things through and actually provide realistic guidance on the entire reporting process of these payments.