Did you know that the Federal Government introduced an incentive in October 2011 that is applicable to any business that increased their payroll in the 2011 year over that of the 2010 year?
How can you Apply for the Credit?
To apply, all you need to do is file your annual T4 Slips and Summary for your employees. If the total paid for the employer’s portion of employment insurance is more in 2011 than was paid in 2010, that difference, to a maximum of $1,000, will be refunded to the business.
For example, if your portion of EI premiums paid in 2010 was $2,300 and in 2011, you then hired new employees and paid employer EI premiums of $3,000, you would be eligible for a credit of $700.
The CRA will automatically check your file to see if this credit applies, so be sure to file those reports.
Who is Applicable?
The credit applies to all small businesses, charities and even domestic payroll accounts. To be eligible for the credit you must:
- Have paid $10,000 or less in employment insurance in 2010
- Have paid more EI premiums in 2011 than in 2010
- Paid your full 2011 payroll remittances while waiting for the credit
How will the Credit be Received?
The credit received is income but considering the tax rate for small business corporations in British Columbia is only 13.5% at the top refund, you will still be ahead by up to $865.
The credit will be received in the form of cash that is automatically applied to your payroll remittance account held at the Canada Revenue Agency (CRA).