The New Brunswick small business investor tax credit is designed to encourage investors (either individuals, corporations, or trusts) to invest in small businesses operating in New Brunswick. As an investor, you’ll need to complete form T1258 to claim your credit.
If you’re an individual investor and you purchase eligible shares in 2016 (that you didn’t already claim in 2015), you’ll earn a non-refundable tax credit worth 50% of your investment (up to $125,000 including unused credits) per year. Alternatively, as a corporate or trust investor, your tax credit is equivalent to 15% of your investment, up to $75,000 per year.
You can claim this credit if you’re a resident of New Brunswick and:
- You’re at least 19
- As an individual, you invested no less than $1,000, or as a corporation or trust, you invested no less than $50,000
- You received a tax credit certificate (to receive one of these, your investments during the year as an individual can’t be more than $250,000; as a trust or corporation, this limit is set at $500,000)
- Your shares were purchased, held, or disposed of by a qualifying trust
- You held the investment for at least four years and
- You didn’t use financial assistance from any government or public authority to acquire your shares
When completing your return, you can claim this credit for the shares you bought in 2016 (that you didn’t claim on your return in 2015) and those purchased in the first 60 days of 2017. If you don’t need to use the full tax credit in a given tax year, you can carry it forward 7 years, or back 3 years.
What’s an eligible share?
An eligible share is a newly issued share of the capital stock of a business that’s registered under the Small Business Investor Tax Credit Act. These shares don’t include any that, in the opinion of the Minister of Finance, were issued with the intention of claiming the Small Business Investor Tax Credit.
Remember, before you invest, ask to see the business’ certificate of registration under the Small Business Investor Tax Credit program. Doing so allows you to make sure that the company you’re about to invest in is part of the program.
If you’re filing a paper return, you’ll need to attach a copy of your NB-SBITC-1 tax credit certificate. If you’re filing electronically, make sure you keep all of your supporting documents in case the Canada Revenue Agency (CRA) asks to see them later.
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
Before you begin, make sure that you told us that you lived in NEW BRUNSWICK on December 31, 2016.
- Under the PREPARE tab, click the LET'S TALK ABOUT 2016 icon.
- Select the checkbox labelled I had investments and/or investment income, or I bought and/or sold property.
- Click the PENSION PLANS AND INVESTMENTS icon. You will find yourself here:
- Under the RESOURCE INCOME AND CREDITS heading, select the checkbox labelled New Brunswick small business investor tax credit (T1258), then click Continue.
- When you arrive at the page for the New Brunswick small business investor tax credit, enter your information into the tax software.