Ontario's Small Business Support Payments Will Be Taxable For 2010 Income Taxes
A representative of the federal government confirmed this week that the amounts paid by the Ontario Government as small business transition support payments will be considered to be income for income tax purposes and will be taxable. As a result, the $300 - $1000 just became a smaller amount that can be spent on harmonized sales tax (HST) compliance.
What is an interesting twist is that Ontario signed on to HST after the Federal Government agreed to provide a certain amount of money. Did the Ontario negotiators realize that some of that money would go right back to the federal government in the form of income tax?
Small businesses must remember to include this one small time payment as income when reporting their 2010 income. if they forget, the Canada Revenue Agency (the entity that is responsible for making the list of who is to receive the transition payment and how much they are to receive) may assess unreported income tax, penalties and interest.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
