GST/HST input tax credits: what you can claim back.
An input tax credit lets a GST/HST-registered business recover the sales tax it paid on business purchases. This page explains how the credit works, what the CRA needs to see on a receipt, and then gives you a free checklist to find the credits hiding in your own quarter of receipts.
What is an input tax credit on GST/HST?
An input tax credit, usually shortened to ITC, is the GST or HST you paid on a business purchase and are allowed to claim back. You do not get it as a refund cheque. You subtract it from the GST/HST you collected from your own customers, and remit only the difference.
A worked example. Say you collected $1,300 of GST/HST from clients this quarter, and you paid $400 of GST/HST on your own business purchases: software, fuel, a new laptop, your accountant's invoice. You claim that $400 as input tax credits and remit $900 instead of $1,300. The $400 was always your money. It only comes back if you claim it, and you can only claim it if the receipt proves it.
One distinction people mix up constantly: an ITC recovers sales tax, while a business expense deduction reduces your income tax. A single receipt can do both. The GST/HST line on it is an ITC; the pre-tax amount is a deduction on your T2125.
HST input tax credits vs GST input tax credits
The mechanism is the same, and the difference is only which tax appeared on the receipt. In the HST provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island) the federal and provincial portions are combined into one HST line, and you claim the whole thing as a single credit. Everywhere else you claim the 5% GST. Provincial sales tax in British Columbia, Saskatchewan, Manitoba and Quebec's QST work under separate rules and are not part of a GST/HST input tax credit claim, though QST has its own equivalent.
What this means in practice: check the tax line on the receipt itself rather than assuming a rate from where you live. A supplier in another province may have charged a different rate than your own.
How to claim an input tax credit on GST/HST you have paid
- Be registered. You can only claim ITCs for periods in which you were a GST/HST registrant. Registration is mandatory once your taxable revenue passes $30,000, and optional below it, but registering is what unlocks the credits.
- Keep documentation that qualifies. The information the CRA requires scales with the size of the purchase, and above the higher tier the receipt must show the supplier's GST/HST registration number. A card slip showing only a total is not enough.
- Claim only the business-use share. If something is 60% business and 40% personal, the credit follows the business portion.
- Total the GST/HST for the period across every qualifying receipt.
- Report it on your GST/HST return and remit the difference between tax collected and tax paid.
General guidance, not tax advice. Documentation thresholds and eligibility rules change and depend on your situation, so confirm the current requirements with the CRA or your accountant before you file.
First, are you a registrant?
You can only claim ITCs if you are registered for GST/HST. Registration becomes mandatory once your total taxable revenue (including any associates) passes the small-supplier threshold of $30,000 in a single calendar quarter or over the previous four consecutive quarters. Below that, registering is optional, and registering voluntarily is what lets you start claiming ITCs.
Your income is reportable on form T2125 no matter how small. The $30,000 figure is a GST/HST registration trigger, not an income-tax exemption.
If you file GST/HST quarterly, the April 1 to June 30 period is due by July 31. No rush needed: this is a calm checklist to run through a quarter of receipts and catch the ITCs that tend to get missed before you file.
Where ITCs usually hide
Tap a card to add it to your Q2 checklistYour Q2 ITC checklist
Tap the categories above that apply to your business. Your selected list shows up here, ready to copy and bring to a session with your receipts.
General guidance, not tax advice. The CRA requires the GST/HST to be shown on the receipt or invoice, and you can claim only the share tied to business use. Confirm your situation with your accountant or the CRA.
Stop the ITCs getting buried
scan-ai reads every line on a receipt and captures the GST/HST shown on it, then maps each line to its T2125 category. So the tax you can recover is recorded next to the purchase instead of hiding in a shoebox. Forward an email receipt or snap a photo and it lands sorted.
Start free, no credit cardKeep going
- CRA business expense categories and the T2125 walks the tax lines your receipts map to once the GST/HST is accounted for.
- Are digital receipts valid for CRA audits? covers what the CRA accepts as proof, which is the part that decides whether a credit survives review.
- Quarterly tax calculator for the instalment side of the same filing rhythm.
- scan-ai for Canadian filers and how tax-line categorization works.
Input tax credits, plainly.
What is a GST/HST input tax credit?
An input tax credit (ITC) lets a registered business recover the GST/HST it paid on eligible business purchases by claiming it against the GST/HST it collected. The practical effect is that you get the sales tax back on legitimate business expenses. This tool flags the everyday expense categories where ITCs are most often missed.
Who can claim input tax credits?
Generally you must be registered for GST/HST to claim ITCs. Below the $30,000 small-supplier threshold registration is optional; once you register, you charge GST/HST on your sales and can claim ITCs on eligible business purchases. You can only claim the business-use portion, not personal use.
When is the GST/HST return due?
It depends on the reporting period the CRA assigns you: annual, quarterly, or monthly. Many small businesses file quarterly, with the return and any balance due one month after the quarter ends (for example, July 31 for a quarter ending June 30). Confirm your own reporting period and deadline with the CRA.
What records do I need to claim an ITC?
You need supporting receipts or invoices that show the supplier, the date, the amount, and the GST/HST charged, plus the supplier's GST/HST number once a purchase passes the CRA documentation thresholds. Keep the actual receipt, not just a bank-statement line. scan-ai captures the GST/HST shown on each receipt and records it next to the purchase.
Is this tax advice?
No. This is general guidance to help you spot credits worth checking. Eligibility and amounts depend on your specific situation, so confirm with your accountant or the CRA before you file.
General guidance, not tax advice. Eligibility depends on your situation; confirm with your accountant or the CRA.