Refundable Tax Credit

You may be eligible for a refundable tax credit for the reporting of tips. The credit is designed to provide compensation for the additional payroll taxes you must pay because the tips received (directly or indirectly) by or allocated to your eligible employees are subject to source deductions and various contributions. The tax credit can be applied to the instalment payments that you are required to make.

To claim this tax credit, you must use the form that corresponds to the legal form of the business you operate.

Sole proprietorship

If you are an individual who operates a sole proprietorship (This link will open a new window), you can claim the tax credit for the reporting of tips intended for individuals.

Corporation

If you operate a business that is a corporation, you can claim the tax credit for the reporting of tips intended for businesses.

Partnership

If your business is a partnership, the members must claim the tax credit on the basis of their percentage interest in the partnership.

Members of a partnership who are individuals can claim the tax credit for the reporting of tips intended for individuals.

Members of a partnership that are corporations can claim the tax credit for the reporting of tips intended for businesses.

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