Happy New Year! Here is an exciting update to share with small business employers:
The 2011 Federal Budget created a Hiring Credit for Small Business (HCSB), a one-time credit intended to stimulate new employment and support small businesses. The HCSB gives small businesses relief from the employer’s share of Employment Insurance (EI) premiums paid in 2011. The credit does this by covering the difference in Employer EI premiums from 2010 to 2011, up to $1,000.
Who is eligible for the HCSB and how will it be calculated?
A small business whose total employer’s EI premiums paid for 2010 was $10,000 or less and whose total premiums increased in 2011 is eligible for a credit.
The credit is calculated as the difference between these two amounts up to a maximum of $1,000. The CRA will automatically calculate the credit when an eligible employer’s 2011 T4 information return is filed.
If an employer meets all listed 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 will apply the amount of the credit towards any outstanding debt owed by the employer.
Can employers reduce their 2011 payroll deduction remittances by the HCSB they anticipate they will receive rather than waiting until the credit is calculated?
No. Employers are not permitted to short remit their 2011 payroll remittances by the amount of the HCSB they think they will receive. The credit will only be calculated once the 2011 T4 information return is filed.