T1258 : New Brunswick Small Business Investor Tax Credit

What’s in this article?

 

What is this?

This credit is for New Brunswick (NB) investors (individuals, corporations, or trusts) who invest in small businesses in the province. The objective of this tax credit is to encourage NB residents to invest in NB small businesses to provide a source of capital for these small businesses.

Effective for 2015 tax year, the Small Business Investor Tax Credit is enhanced and provides a 50% (for investments made on or after April 1, 2015) non-refundable personal income tax credit up to $125,000 per year for New Brunswick individual investors who invest in eligible small businesses in the province. The tax credit for a corporation and trust investor is 15% of the investment up to a maximum annual tax credit of $75,000.

You can claim this credit for investments in eligible shares you acquired in the year. Individual investors can also claim investments made in the first 60 days of the year and claim them in the prior year tax return.

If the investor cannot use the full tax credit in a given year, the tax credit can be carried forward seven years or carried back three years.

To claim the tax credit, complete form T1258: New Brunswick Small Business Investor Tax Credit.

 

Am I eligible?

​If you are a New Brunswick resident who invested in small businesses in the province that are registered under the Small Business Investor Tax Credit program, you may be eligible for the tax credit provided:

  • You are 19 years of age or older;
  • The total investment you made as an individual investor is not less than $1,000, or $50,000 for a corporation or trust;
  • You received a tax credit certificate (The maximum annual investment for which a tax credit certificate is issued to an individual investor under this program is $250,000 and for a corporation and trust investor, it is $500,000);
  • Shares were purchased, held, or disposed of by a qualifying trust for an investor;
  • You held the investment for a minimum of four years; and
  • You did not use financial assistance from any government, municipality or public authority in the acquisition of these shares.

Note: Before you invest, ask to see the business’s certificate of registration under the Small Business Investor Tax Credit program.

An eligible share is a newly issued share of the capital stock of the business that is registered under the Small Business Investor Tax Credit Act. Eligible shares do not include those that, in the opinion of the Minister of Finance, were issued with the aim of claiming the Small Business Investor Tax Credit. Click this link for more information on eligible shares.

If you are filing a paper return, you must attach a copy of the NB-SBITC-1 tax credit certificate received with your tax return. If you are filing electronically, keep all documents to support your claim in case the Canada Revenue Agency (CRA) asks to see them at a later date.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

Important: Before you begin, ensure that you told us that you lived in NEW BRUNSWICK on December 31st of the 2015 tax year, in H&R Block’s tax software. To do this:

  1. Click the HOME tab.
  2. Click the ABOUT YOU icon, and click the Your residence link. You will find yourself here:

Once you have confirmed your residence location, you can claim the New Brunswick small business investor tax credit by following these steps:

  1. Click the PREPARE tab.
  2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:
  3. Click the checkbox labelled I had investments.
  4. Scroll to the bottom of the page and click Continue.
  5. Click the RRSPS AND INVESTMENTS icon. You will find yourself here:
  1. Under the RESOURCE INCOME AND CREDITS heading, click the checkbox labelled New Brunswick small business investor tax credit (T1258).

When you arrive at the page New Brunswick small business investor tax credit, enter your information into the tax software.

 

Where can I learn more?