Input Tax Credit

Plain meaning

A GST/HST credit that eligible registrants can claim for tax paid or payable on business inputs used in commercial activities.

Also called

Key points

• Input Tax Credit depends on the eligibility rules set by the relevant tax, benefit, or program legislation.
• Filing an annual income tax and benefit return is often required so CRA can calculate eligibility and payment amounts.
• Amounts may depend on income, family status, age, disability status, residence, expenses, or the type of property or transaction involved.
• Because the credit is generally non-refundable, it usually reduces tax otherwise payable rather than creating a refund by itself.

Why it comes up

Input tax credits affect business cash flow, pricing, documentation, and audit risk. It can affect business cash flow, compliance work, pricing, payroll, remittances, deductions, or audit exposure.