Last fall the federal government announced the new Small Business Job Credit that will be replacing the previously expired Hiring Credit. Under the new program, eligible small business employers would receive a tax credit of up to $2,200 per year. Under the old Hiring Credit the maximum was $1,000 per year.
The credit will only apply to small businesses that pay $15,000 or less in EI premiums, or roughly 20 full-time equivalent employees. Rates will fall from $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. This reduction will only apply to employers. Employees will see no reduction in their rates.
The government has also stated that the CRA will automatically calculate the credit on a business’ return. This makes it easier for small business owners and ensures they do not miss out on this new credit.
The federal government has claimed that this new program will create jobs, growth and prosperity over the long-term. What do you think? If you are a small business owner will this credit spur you to hire additional employees? Or will this be another tax cut (a minor but albeit very welcome one) which can help improve your business in other areas? Leave a comment below and and let us know.