This week, I’ve been noticing that the Job Credits for Small Business have been appearing in many of my customers’ CRA online accounts. I haven’t seen any refund cheques or deposits yet, but those should be starting to roll in soon.
You might remember the Hiring Credit for Small Business (HCSB) that was around for several years and ended in 2013. This is similar. One notable different is that the CRA will be sending out the refunds rather than having small businesses apply the credits to an upcoming payment.
What’s the Small Business Job Credit?
The Small Business Job Credit will effectively lower small businesses’ Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90% of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15%.
How will I get the credit?
No action necessary. The Canada Revenue Agency will automatically calculate the credit, meaning no paperwork for you.
The credit will not be carried forward. You will receive a refund by direct deposit (if you’ve signed up for it) or mailed cheque less any outstanding amounts on your account.
This credit can be entered as income or as a reduction in your EI expense.
How do I enter this into QuickBooks?
Banking > Make Deposits
How do I enter this into QBO?
Plus Sign > Bank Deposit
For more information about the Small Business Job Credit, check out http://www.cra-arc.gc.ca/whtsnw/tms/sbjc-eng.html