Maximize Your Benefits: Key Government Incentives Ending in 2023
At Hawkins & Co., we’ve been in discussions with many of our clients regarding these critical updates, and the time has come to share invaluable insights. In this blog, we spotlight government incentives that are either set to vanish or decrease after December 31, 2023.
Regional Ontario Investment Tax Credit – Act Now for Maximum Returns!
One of the most significant incentives, the Regional Ontario Investment Tax Credit, is facing a substantial reduction after December 31, 2023. The maximum credit will drop from $90,000 to $45,000. Seize the opportunity to claim up to $90,000 back from the provincial government against the purchase or renovation of a qualifying building. Calculate it as 20% of the excess of your spending over $50,000, reaching a maximum refund of $90,000. However, after the specified date, the rate plummets to 10%, and the maximum refund shrinks to $45,000.
Remember, to qualify for the higher rate, the building must be available for use before December 31, 2023.
More details can be found here.
Designated Immediate Expensing – Act Before Year-End!
As of December 31, 2023, the Designated Immediate Expensing provision concludes. While typically, business expenditures are written off in the year of spending, capital assets like vehicles and equipment usually enjoy write-offs over several years. As part of the COVID response, the government permitted a full write-off in the year of purchase, but this benefit is ending. To claim the full value of any vehicle or equipment purchased this year, you must have made the purchase (i.e., have the invoice) before December 31, 2023. Post this date, you’ll have to wait for the write-off.
It’s crucial to note that this change doesn’t alter the total value of tax deductions; it merely affects the timing of when the deductions reduce your taxes. For instance, if you buy a $10,000 piece of equipment on December 31, 2023, at the Small Business tax rate (12% in Ontario), you save $1,200 in taxes for 2023. If the purchase occurs on January 1, your tax savings are spread out over subsequent years.
CEBA Forgiveness – Don’t Miss the Deadline!
For those who accessed funds from the Canadian Emergency Business Account (CEBA) in 2020, a reminder that forgiveness is possible, either $10,000 or $20,000, depending on the borrowed amount. However, to qualify for forgiveness, you must complete the repayment by January 18, 2024. We anticipate banks are going to be backed up processing these repayments – so act early, if not already done!
These are just a few changes that we guide our clients through and ensure that they can make informed decisions. Not a client? Don’t let these valuable opportunities slip away – contact our expert team today either by clicking here or giving us a call at 519-997-2900.