SB Partners logo

Small Business Job Credit


Christine Mills on March 21, 2016 in Advice for Business Owners

Receiving Money from CRA and Don’t Know Why?

If you are a business owner that has recently received a cheque from the Receiver General, do not be alarmed. The refund may be a result of the Small Business Job Credit; a two-year measure to help small businesses by lowering their Employment Insurance (EI) premiums from the legislated rate in 2015 and 2016. Business owners do not have to apply for this credit. CRA will automatically establish eligibility for each year separately based on the T4 information filed for 2015 and 2016.

Employers are eligible for this credit if they meet all of the following criteria in 2015 and/or 2016:

  • Deducted and remitted EI premiums from the remuneration paid to employees (along with the businesses' share of EI premiums) to the payroll program (RP) account;
  • Reported income and deductions on a T4 slip and filed this information on the RP account for 2015 and/or 2016; and
  • The total of employer EI premiums paid for all the RP accounts in 2015 and/or 2016 was $15,000 or less.

Please note that a cheque for the Small Business Job Credit will have a description, ‘Income Tax Refund’ and it will show your corporate payroll number (with ‘RP’ extension). The credit must be recorded as income or as a reduced EI expense for the year in which the credit is received. This process applies if CRA transferred some, or all of the credit to pay off debt. We recommend that our clients record this income as a credit to their EI expense.

If you have any questions about the Small Business Tax Credit, please contact Christine Mills at (905) 633- 6357.