1. What is the hiring credit for small business (HCSB) for 2012?
2. Who is eligible for this credit and how is it calculated?
3. Is there a time limit for getting the HCSB?
4. If an employer meets all of the above-listed eligibility criteria but has an outstanding debt with the CRA, will the CRA still calculate the credit?
5. Can employers reduce their 2012 payroll deduction remittances by the amount they anticipate they will receive as an HCSB rather than wait until the credit is calculated?
6. Where can I get more information about the extension to the HCSB?

The budget extended the hiring credit for small business (HCSB) for 2012.

Q1. What is the HCSB for 2012?

A1. The HCSB for 2012 is identical to the HCSB that was introduced for 2011 except that it will be calculated using the employer's employment insurance (EI) premiums paid for 2012.

The HCSB is a credit of up to $1,000 based on the increase in an employer's EI premiums paid for 2012 over those paid for 2011.

Q2. Who is eligible for this credit and how is it calculated?

A2. A small business whose total employer EI premiums paid for 2011 was $10,000 or less and whose total premiums increased in 2012 is eligible for a credit. The amount of the credit is the increase between the employer's EI premiums in 2012, over those paid in 2011. The amount to be credited to your payroll account will be greater than $2, but not more than $1,000.

Once an eligible employer's 2012 T4 information return (T4 Summary and T4 slips) is processed, the Canada Revenue Agency (CRA) will automatically calculate the credit based on the increase in the employer's 2012 premiums over those paid for 2011.

Q3. Is there a time limit for getting the HCSB?

A3. Yes, an HCSB will not be allowed on a 2012 T4 information return(s) received by the CRA on or after January 1, 2016.

Q4. If an employer meets all of the above-listed eligibility criteria but has an outstanding debt with the CRA, will the CRA still calculate the credit?

A4. Yes, the CRA will calculate the HCSBand apply the amount of the credit toward any outstanding debt the employer owes.

Q5. Can employers reduce their 2012 payroll deduction remittances by the amount they anticipate they will receive as an HCSB rather than wait until the credit is calculated?

A5. No, employers are not permitted to under-remit their 2012 payroll remittances by the amount of the HCSB they think they will get. The credit will only be calculated once the 2012 T4 information return is processed.

Q6. Where can I get more information about the extension to the HCSB?

A6. The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.

In the meantime, please consult the Department of Finance Canada's Budget 2012 documents for details.