The 2011 Budget introduced 3 changes for businesses.
1. New hiring credit for small business
To encourage the hiring of more Canadians, small businesses will receive up to $1,000 as a one-time hiring credit. This credit is intended to offset an increase in their 2011 Employment Insurance (EI) premiums over those in 2010. The credit applies to employers whose total EI premiums were at or below $10,000 in 2010.
2. Extension to the Capital Cost Allowance (CCA)
The temporary accelerated CCA on machinery and equipment will continue for an additional 2 tax years.
Small businesses with total EI premiums of $10,000 or less in 2010 are eligible for a one-time $1,000 hiring credit.
3. Review of Employee Profit Sharing Plans (EPSPs)
The 2011 Budget identified a concern that EPSPs may be used to steer profits to family members in order to reduce or defer taxes, or to avoid making Canada Pension Plan (CPP) contributions and paying EI premiums. The federal government will engage in a consultative process with stakeholders to review the existing rules.