TaxTips.ca Canadian Tax and Financial Information	Small Business Deduction	TaxTips.ca does not research or endorse any product or service appearing in ads on this site. Before making a major financial decision you should consult a qualified professional. Copyright © 2012
Looking for US tax information? See USTaxTips.net

Revise your listing in the TaxTips.ca Business Directory.

Need an accounting, tax or financial advisor? Look in the TaxTips.ca Business Directory.

Glossary -> Small business deduction

Small Business Deduction

Income Tax Act s. 125

The small business deduction is a reduction in corporate taxes for Canadian controlled private corporations, or CCPCs. The reduced rate of tax is available on active business income up to the corporation's business limit for the year. The federal business limit is $500,000 for 2011. It was increased from $400,000 in 2008 to $500,000 for 2009 and later years.

Eligibility for the small business deduction also depends on the amount of the corporation's taxable capital employed in Canada. For more information see the information on the small business deduction in the Canada Revenue Agency T2 Corporation Income Tax Guide.

See also:

Corporate tax rates - federal and provincial, general and small business

Should you incorporate your small business?

Canada Revenue Agency (CRA) information

	IT-73R6 Small Business Deduction
	T4012 - T2 Corporation Income Tax Guide - search for Small business deduction

Revised: March 06, 2012

The information on this site is not intended to be a substitute for professional advice. Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage.
See our Business Directory for tax, accounting and finance-related firms in your area.
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.