New Small Business Tax Deduction

Eligibility

You can apply if your business qualifies for the federal small business deduction for the applicable tax year and maintained a permanent establishment in Nova Scotia at any time during that year.

A new Nova Scotia business is eligible if the business meets the following criteria:

• has at least 2 employees (1 employee needs to be unrelated to any shareholder of the corporation)
• is not in a partnership or joint venture with an ineligible corporation
• is not a beneficiary of a trust where any beneficiary is ineligible
• is not a professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor
• is not a business carrying on the same, or substantially the same, business activity that it carried on as a sole proprietorship, partnership or corporation

How to apply

1. File your corporate income tax return and Schedule 341 with Canada Revenue Agency.
2. Complete the application form.
3. Check the application for details on all required supporting documents.
4. Send your completed application and supporting documents by email.
5. After you get your Eligibility Certificate, you can adjust your corporate income tax return to claim the New Small Business Tax Deduction.

Before you start

Make sure you have:

• Business Number from Canada Revenue Agency (CRA)
• incorporation date
• list of shareholders and their individual percent of shares
• total hours worked in the tax year by each employee unrelated to any shareholders
• percent of total wages and salaries paid by the corporation in the tax year to employees who are Nova Scotia residents
• signature of authorized signing officer
• corporate income tax return for the relevant taxation year (including Schedule 341)

Application form