Budget 2013 - Hiring credit for small business - 2013 Expansion and Extension
Notice to the reader
This measure has received Royal Assent.
The budget proposes to expand and extend the hiring credit for small business (HCSB) for 2013.
What is the HCSB for 2013?
The HCSB for 2013 extends the HCSB that was introduced for 2011 and 2012. The extended HCSB will be a credit of up to $1,000 based on the increase in an employer's EI premiums paid for 2013 over those paid for 2012.
The budget also proposes to expand the HCSB for 2013 so that more small businesses will be eligible to receive the credit.
Who is eligible for this credit and how is it calculated?
A small business whose total employer EI premiums paid for 2012 was $15,000 (increased from $10,000 used for 2011 and 2012) or less and whose total premiums increased in 2013 will be eligible for a credit. The amount of the credit will be the increase between the employer's EI premiums in 2013, over those paid in 2012.
Once an eligible employer's 2013 T4 information return (T4 Summary and T4 slips) is processed, the Canada Revenue Agency (CRA) will automatically calculate the credit based on the increase in the employer's 2013 premiums over those paid for 2012. The amount to be credited to the payroll account of an eligible employer will be greater than $2, but not more than $1,000.
Is there a time limit for getting the HCSB?
Yes, an HCSB will not be allowed on a 2013 T4 information return(s) received by the CRA on or after January 1, 2017.
If an employer meets all of the above eligibility criteria but has an outstanding debt with the CRA, will the CRA still calculate the credit?
Yes, the CRA will calculate the HCSB and apply the amount of the credit toward any outstanding amount the employer owes.
Can employers reduce their 2013 payroll deduction remittances by the amount they anticipate they will receive as an HCSB rather than wait until the credit is calculated?
No, employers are not permitted to under-remit their 2013 payroll remittances by the amount of the HCSB they think they will get. The credit will only be calculated once the 2013 T4 information return is processed.
Where can I get more information about the expansion and extension to the HBSC?
The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web site often. All new forms, policies, and guidelines will be posted as they become available.
In the meantime, please see the Department of Finance Canada's Budget 2013 documents for details.
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