The Manitoba employee share purchase tax credit allows current employees of an eligible corporation to buy and own a portion of the business. Employees who buy shares from their employer, can receive a partially refundable tax credit of 45% if the business has a registered Employee Share Ownership Plan (ESOP).
The first $27,000 of the tax credit is fully refundable. The remainder can be claimed as a non-refundable credit (up to $67,500 per year less the refundable tax credit, to a lifetime maximum of $202,500). Unused credits can be carried forward 10 years or carried back three years, but not to a tax year before 2015.
Note: Your T1256-2: Manitoba employee share purchase tax credit form will help you calculate the refundable and non-refundable portions of this tax credit. Completing this page in H&R Block’s tax software will automatically calculate how much of the credit you can carry forward for use in the future.
If you’re filing a paper return, you’ll need to attach your T1256-2 form and ESOP receipt to your return. If you’re preparing your return online, make sure you keep all your supporting documents just 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 2018 tax software :
Before you begin, make sure that you told us that you lived in Manitoba on December 31, 2018.
- Under the PREPARE tab, click the IN THIS SECTION icon.
- In the Investments box, click the Add This Topic button.
- Click the PENSION PLANS AND INVESTMENTS icon. You'll find yourself here:
- Under the RESOURCE INCOME AND CREDITS heading, select the checkbox labelled Manitoba employee share purchase tax credit (T1256-2), then click Continue.
- When you arrive at the page for Manitoba employee share purchase tax credit, enter your information into the tax software.