Merchant Advance Blog

Blog Article: Taking Advantage of Small Business Tax Credits

In a small business landscape where cash flow is king, seeking out alternative sources from which to supplement your business’ access to this resource is generally worth the time and effort. Tax credits with cash refunds are some of the incentives which small business owners would be wise to investigate. They vary from province to province, but many offer significant refunds that could help your business improve its cash flow. Doing your homework on these credits may be well worth your while!


  • Apprenticeship Job Creation Tax Credits

If you hire an apprentice who is in the first two years of a Red Seal approved apprenticeship program registered with the government, you could be eligible for a credit of 10% of their salary. In Ontario, the Apprenticeship Training Tax Credit provides a 35 per cent to 45 per cent cash refundable credit based on the salaries and wages paid to apprentices, with the maximum annual credit per apprenticeship being $10,000, and $40,000 over a four year period.

  • Hiring Credit for Small Business

As an employer, you could get a credit of up to $1,000 toward your payroll account if your EI premiums increased in 2013. For this credit, you don’t even need to apply! The credit will be calculated automatically using the information from your T4 slips filed for 2012 and 2013

  • Digital Media Credits

The media, film, music and digital sectors are rapidly expanding, and represent a significant number of Canadian small businesses. Various provinces have offered incentives for the production of digital works. The Ontario Film and Television Tax CreditOntario Interactive Digital Media Tax CreditRefundable tax credit for film production services (Quebec), and others specific to individual provinces, are all excellent examples of credits available to businesses in the digital and creative industries.

  • Small Business-Specific Tax Credits

Canadawide, the Small business Deduction is calculated when you complete your corporation’s T2 income tax return. If you are not associated with any other corporations, the allowable business limit you can claim is $500,000.

There are many, many more credits available, but the province in which you operate may determine those for which you could be eligible. A relatively comprehensive list is available through the Canada Business Network page. These small business tax credits offer hardworking businesses and their owners a chance to improve their cash flow and incentivize consumer participation in local economies.

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