Good news for Small Business in the Okanagan!
In the 2011 federal Budget, the federal government announced a hiring credit for Canadian small businesses, to provide an incentive for such businesses to take on new employees. That program provided small business owners with a small business tax credit equal to any year-over-year increase in EI premiums paid by the business. The maximum credit available was $1,000 and any amount receivable was automatically credited to the employer’s payroll account with the Canada Revenue Agency (CRA). There was no requirement for the business owner to apply for the credit, as any available credit amount would be calculated by the CRA from the T4 information filed by the business for the current and previous taxation years. For purposes of the credit, a small business owner was defined as one whose total employer EI premiums for the previous year was $10,000 or less. Employers who created a new business would also be eligible for the credit.
The EI hiring credit program, which was originally to be available only for 2011, was extended to apply as well for the 2012 taxation year. IThis is good news for small business in the Okanagan.
As in previous years, the credit will be equal to any year-over-year increase in EI premiums paid by a small business owner. For 2013, therefore, the credit will be equal to the difference between EI premiums payable for 2013 over those payable for 2012, to a maximum of $1,000. As well, the credit will continue to be administered by way of a credit amount posted to the employer’s payroll account, and the amount of any credit will be calculated by the CRA when the employer files a T4 information return for 2013. That filing must take place by the end of February 2014. It’s also possible for employers to request that the amount of any credit be refunded to them. Such a request can be made through the CRA’s online services for businesses.
Effective for 2013, however, the eligibility rules for the credit have been expanded to include businesses with larger payrolls. Specifically, employers which had less than $15,000 in EI premiums payable for the 2012 taxation year will be eligible to claim the credit for 2013. In previous years, the credit was available only to those employers having EI premiums payable of less than $10,000.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.