Hiring credit for small business (HCSB)

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 paying up to $1,000, based on the increase in an employer’s EI premiums paid in 2011 over those paid in 2010.

How to tell if you are eligible

You are eligible for this credit if you meet all of the following conditions:

• you deducted EI premiums from the remuneration you paid to your employees, or paid the worker’s share of EI premiums for barbers, hairdressers, fishers, or drivers of taxis and other passenger-carrying vehicles and you remitted these premiums (along with your share of EI premiums) to your payroll (RP) account;
• you reported the income and deductions on a T4 slip and filed this information on your RP account for 2010 (see below) and 2011;
• the total of employer EI premiums you paid for 2010 (see Note below) was $10,000 or less; and
• your total employer EI premiums increased in 2011.

How the CRA will calculate the credit

There is no application form to complete.

If you are eligible, the CRA will automatically calculate the amount of your HCSB using the EI information from the T4 slips you filed with your 2010 and 2011 T4 information returns.

How you will receive the credit

Once the CRA has calculated your credit, they will apply it to any outstanding balance on your payroll account(s), and then transfer the remaining credit to the current year.

Employees hired in 2011

You do not have to keep special records for employees that you hired or for the increased employer EI premiums that you paid in 2011.

New businesses in 2011 will receive the credit

If you started your business in 2011 and received a new business number, you will receive the HCSB if you are eligible.

Sold or closed your business

If you sold or closed your business in 2010, you will not be eligible to receive the HCSB.

If you sold or closed your business in 2011, you may be eligible to receive the credit if, before the sale or closure, you paid more employer EI premiums in 2011 than you did in 2010 and your total employer EI premiums in 2010 were $10,000 or less.

Time limit for obtaining the credit

No HCSB will be allowed if we receive your original 2011 T4 return(s) or any amended, canceled or additional T4 slips for 2010 or 2011 on or after January 1, 2015.