Canadian small-business tax credits

Canadian small-business tax credits

Canadian small-business tax credits

Canadian  business owner should take some time to learn about  Canadian small-business tax credits. Majority of them do not have time or knowledge at all.They do not teach them at school.Even very few accountants or other business professionals ever use them. To help, here are some examples of Canadian small-business tax credits.

 

Scientific Research and Experimental Development (SR&ED). Are you creating new products, developing new processes or using new materials? If so, you may be eligible to claim the SR&ED tax credit. For eligible projects, the federal government provides refundable tax credits of 35% of the eligible costs plus overhead, including salaries, contractor fees and materials. Some provinces also have lucrative tagalong SR&ED programs such as Ontario’s 10 per cent refundable Innovation Tax Credit.

 

Ontario Interactive Digital Media Tax Credit (OIDMTC). Although currently under review by the Ontario government, the Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit based on eligible Ontario labor and marketing and distribution expenditures claimed by qualifying corporations with regard to their work on interactive digital media products.

 

If your business revolves around the development of content that will be delivered in a digital form and is intended to inform, educate or entertain, you may be eligible to receive a refundable tax credit of 35 per cent to 40 per cent of your eligible expenditures, depending on the developed product.

 

Apprenticeship tax credits. Businesses that employ trade workers on apprenticeship contracts may be eligible to receive apprenticeship tax credits. The federal government offers an incentive called the Apprenticeship Job Creation Tax Credit where you’re eligible to receive 10 per cent of apprentice salaries as non-refundable tax credits. 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.

 

Other helpful programs. It’s important to realize that tax credits provide after-the-fact funding. For more ‘up-front’ arrangements, the federal and provincial governments have grant and funding programs such as the Industrial Research Assistance Program (IRAP) or the Ontario Centres of Excellence. New businesses should also consider entrepreneurial friendly lending such as Business Development Bank of Canada and Canadian Small Business Financing Program.

 

Scientific Research and Experimental Development (SR&ED). Are you creating new products, developing new processes or using new materials? If so, you may be eligible to claim the SR&ED tax credit. For eligible projects, the federal government provides refundable tax credits of 35 per cent of the eligible costs plus overhead, including salaries, contractor fees and materials. Some provinces also have lucrative tagalong SR&ED programs such as Ontario’s 10 per cent refundable Innovation Tax Credit.

 

Ontario Interactive Digital Media Tax Credit (OIDMTC). Although currently under review by the Ontario government, the Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit based on eligible Ontario labour and marketing and distribution expenditures claimed by qualifying corporations with regard to their work on interactive digital media products.

 

If your business revolves around the development of content that will be delivered in a digital form and is intended to inform, educate or entertain, you may be eligible to receive a refundable tax credit of 35 per cent to 40 per cent of your eligible expenditures, depending on the developed product.

 

Apprenticeship tax credits. Businesses that employ trade workers on apprenticeship contracts may be eligible to receive apprenticeship tax credits. The federal government offers an incentive called the Apprenticeship Job Creation Tax Credit where you’re eligible to receive 10 per cent of apprentice salaries as non-refundable tax credits. 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.

 

Other helpful programs. It’s important to realize that tax credits provide after-the-fact funding. For more ‘up-front’ arrangements, the federal and provincial governments have grant and funding programs such as the Industrial Research Assistance Program (IRAP) or the Ontario Centres of Excellence. New businesses should also consider entrepreneurial friendly lending such as Business Development Bank of Canada and Canadian Small Business Financing Program.

 

Canadian small-business tax credits may qualify for your growth as well as save money.  Canadian small-business tax credits must be part of your businesses’ plan to grow as part of Canadian tax payers benefits.

 

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