HCSB for 2013
The budget proposes to expand and extend the hiring credit for small business (HCSB) for 2013. Once the legislation is passed, the rules will be as follows:
- How to tell if you are eligible
- How the CRA will calculate the credit
- How you will receive the credit
- What you cannot do while waiting to receive a credit
- Amending, cancelling or adding T4 slips
- If you hired employees in 2013
- If you started a new business in 2013
- If you sold or closed your business
- If you restructured your business
- Time limit for getting the credit
- HCSB is business income
- Registered charities
How to tell if you are eligible
You are eligible for this credit if you meet all of the following conditions:
- you deducted EI premiums from the remuneration you paid to your employees, or paid the worker's share of EI premiums for barbers, hairdressers, fishers, or drivers of taxis and other passenger-carrying vehicles and you remitted these premiums (along with your share of EI premiums) to your payroll (RP) account;
- you reported the income and deductions on a T4 slip and filed this information on your RP account for 2012 (see Note below) and 2013;
- the total of employer EI premiums you paid for 2012 (see Note below) was $15,000 or less; and
- your total employer EI premiums increased in 2013.
If you opened, closed or restructured your business during 2013, your total employer EI premiums for 2012 may be zero. See the information below.
How the CRA will calculate the credit
There is no application form to complete.
If you are eligible, the CRA will automatically calculate the amount of your HCSB using the EI information from the T4 slips you filed with your 2012 and 2013 T4 information returns. The amount of the credit is the difference between the employer's portion of the EI premiums you paid in 2012 and 2013. The amount to be credited to your payroll account will be greater than $2, but no more than $1,000.
For example, if your portion of EI premiums paid in 2012 was $2,300 and in 2013, you hired new employees and paid employer EI premiums of $3,000, you would be eligible for a credit of $700.
If you have more than one payroll account (RP) under your business number (BN), the CRA will determine if you are eligible to receive a credit by adding the employer EI premiums for all RP accounts under that BN. The amount of credit that each RP account will receive is generally proportional to the amount of the employer's EI premiums that was paid into each RP account.
How you will receive the credit
Once we have calculated your credit, we will apply it to any outstanding balance on your payroll account(s), and then transfer the remaining credit to the current year. Your statement of account will tell you how we applied the credit. You can either apply this amount to your next remittance or obtain a refund for this amount through direct deposit or by cheque. For more information about direct deposit, see How to request direct deposit.
Since January 2013, employers have the option to make an online request using My Business Account to get their HCSB refunded to them.
What you cannot do while waiting to receive a credit
Even if you are eligible for the HCSB, you cannot reduce your payroll remittances by the amount of the credit that you think you will receive until we advise you to.
Amending, cancelling or adding T4 slips
Your eligibility to receive the HCSB and the amount you receive may be affected if you make changes to the 2012 or 2013 T4 information on which your credit is calculated. Once we process amended, cancelled or additional T4 slips, we will recalculate your eligibility for the credit and adjust (increase or decrease) the credit you may have received.
If you make any changes to the 2012 EI premiums reported, it may affect the HCSB for both 2012 and 2013.
If you hired employees in 2013
You do not have to keep special records for employees that you hired or for the increased employer EI premiums that you paid in 2013.
If you started a new business in 2013
If you started your business in 2013 and received a new BN, you will receive the HCSB if you are eligible. We will use a zero value for your 2012 employer's share of EI premiums when we calculate the amount of the credit that you are eligible to receive.
If you sold or closed your business
If you sold or closed your business in 2012, you will not be eligible to receive the HCSB for 2013. However, you may be eligible to receive the HCSB for 2012.
If you sold or closed your business in 2013, you may be eligible to receive the credit if, before the sale or closure, you paid more employer EI premiums in 2013 than you did in 2012 and your total employer EI premiums in 2012 were $15,000 or less.
If you restructured your business
If you restructured your business in 2013 and received a new BN, you will receive the HCSB if you are eligible. We will use a zero value for your 2012 employer's share of EI premiums when we calculate the amount of the credit that you are eligible to receive.
Time limit for getting the credit
No HCSB will be allowed if we receive your original 2013 T4 return(s) or any amended, cancelled or additional T4 slips for 2012 or 2013 on or after January 1, 2017.
HCSB is business income
If you receive the HCSB, you have to claim that amount as income or reduce your EI expense when you file your business return, even if we transferred some or all of this credit to pay off a debt.
If you are a registered charity, you are eligible to receive the HCSB as long as your 2012 employer EI premiums for all RP accounts under that BN were not more than $15,000 and you paid more employer EI premiums in 2013 than you paid in 2012.
- How to request direct deposit
- Hiring Credit for Small Business - Budget 2013
- E-services for businesses
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