Increased Employment Incentive (IEI)
The Increased Employment Incentive (IEI) was introduced as part of the BC provincial government’s StrongerBC: BC’s Economic Recovery Plan. This initiative allows eligible employers to apply for a one-time tax credit of 15% of the employer’s eligible remuneration for eligible employees in the qualifying period.
For the purpose of this incentive, an eligible employer is defined as an employer who:
- Increased their eligible remuneration for the qualifying period compared to the base period and,
- Had a fixed place of business in BC for the qualifying period.
For the purposes of the calculations, the base period is from July 1st to September 30th, 2020, and the qualifying period is from October 1st to December 31st, 2020.
Eligible remuneration is the remuneration paid by an employer to, or on behalf of, an eligible employee for the base or qualifying period and must not exceed $1,129.33/week per employee. This includes salaries and wages, bonuses, commissions, advances, vacation pay, gratuities/tips, employer-paid contributions to group RRSP’s and employee profit-sharing plan (EPSP), amongst other forms of remuneration. It does not, however, include employer-paid contributions to registered pension plans, deferred profit-sharing plans, retiring allowances, stock option benefits, dividend income, private health services plans (PHSP), and retirement compensation agreements (RCA), to name the most common forms of ineligible remuneration. Examples of IEI calculations can be found here.
Eligible employees are those who work in BC during the qualifying or base period, and that work at arm’s length with the business owner, unless a non-arm length’s individual was an employee at the beginning of the base period.
There is no maximum amount an employer can receive, it is not offset by any other federal or provincial COVID-19 benefit programs, but it can be used to offset any currently outstanding provincial tax debts, including the employer health tax (EHT).
To apply for the IEI, employers will need to provide the following:
- Company information including business number (BN), location, incorporation number (if applicable), your North American Industry Classification System (NAICS) code.
- Eligible employees information including SIN and full name.
- The company’s total BC remuneration and eligible remuneration for both base and qualifying periods, broken down by employee.
- The company’s banking information.
Applications can be submitted through a company’s eTaxBC account, or online through a government website for employers who do not have an eTaxBC account to pay PST or the EHT.
If you would like assistance confirming eligibility or applying for the IEI, our office will be able to help assist with an application or answer any questions.
BC PST Rebate on Select Machinery & Equipment
In an effort to alleviate the financial impacts associated with government-imposed restrictions surrounding the COVID-19 pandemic, the BC PST Rebate on Select Machinery & Equipment is a provincial sales tax program available to corporations. The rebate allows most corporations, including professional corporations, to receive a refund on PST paid on purchases of qualifying machinery and equipment between September 17th, 2020 and September 30th, 2021. Regardless of purchase date, eligible goods must be received by October 1st, 2021, or have a written contract specifying the goods will be delivered on or before November 30th, 2021.
Eligible machinery and equipment include: assets described in Schedule II of Federal Income tax regulations for Capital Cost Allowance (CCA) classes 8, 10, 12, 16, 43, 43.1,43.2, 46, 50, 53, 54, and 55. These classes generally include machinery and equipment, tools, appliances, furniture, computer hardware and software (eligible for CCA). The equipment purchased must have also been obtained substantially (greater than 90%) for the purposes of producing business income.
The rebate also applies to electric vehicle charging stations and zero-emission vehicles, but does not apply to other vehicles.
Under certain situations, after a corporation receives the PST rebate, there may be a repayment required.. Specifically, if the purchased items are returned to a seller, if leased equipment is used other than for the purposes of producing an income during the rental period for which the rebate has been paid, or if purchased equipment is also not used substantially for purposes of producing an income at any time within two years of receiving the rebate.
Applications will be accepted starting April 1st, 2021, and you are able to apply online through the BC PST Rebate Website.
As is the case with many government COVID-19 financial support programs introduced, the qualifications and application process can be complex. If you suspect you are eligible to receive this rebate, or wish to take advantage of this opportunity to upgrade eligible equipment while receiving a rebate on PST paid, your TPC Financial Group advisor will be able to assist in determining eligibility and in navigating the application process.