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Quebec offers small business relief & tax credit changes

Quebec offers small business relief & tax credit change

Quebec's relief will account for difficulties faced due to the COVID-19 pandemic

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Quebec will allow taxpayers to make an "ad hoc" adjustment to the calculation of remunerated hours, for the small business deduction (SBD) as a result of the COVID-19 pandemic. In a bulletin released on June 29, 2020, Quebec provides details on this new adjustment and also announces further changes will be introduced so that specialized nurse practitioners may issue a certification for the application of certain credits. Finally, changes will be introduced to allow distance learning for certain credits, among other changes.

Background

Generally, under Quebec's SBD rules, a corporation's SBD rate for a taxation year is reduced linearly, where the total number of remunerated hours is between 5,500 and 5,000. The rate reaches zero when the total does not exceed 5,000 hours, among other conditions.

SBD adjustment

Quebec will allow taxpayers to make an ad hoc adjustment to the calculation of their remunerated hours for the SBD, which will apply for the given taxation year. As a result, where all or part of the period that begins on March 15, 2020 and ends on June 29, 2020 (the closing period) is included in a corporation's given taxation year, Quebec will allow taxpayers to multiply the number of remunerated hours otherwise determined by 365 divided by the number of days in that year in excess of the number of days in the closing period in that year. The maximum number of days in the closing period is 78. The resulting figure will be equal to the number of remunerated hours determined in respect of the corporation's employees for that year for purposes of the SBD.

Tax credits for nurse practitioners

Quebec will allow specialized nurse practitioners to issue a certificate for the application of the following tax credits:

  • The non-refundable tax credit for travel and lodging expenses
  • The non-refundable tax credit for moving expenses, and
  • The refundable tax credit for home support for seniors

Tax credits and distance learning

Quebec will allow distance learning expenses to be included in the refundable tax credit for childcare expenses and the disability support deduction. These amendments will apply to expenses incurred after December 31, 2019.

For details, contact your KPMG advisor.

Information is current to July 14, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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