Updated Checked by the Tax-Services.ca editorial team How we check
Input tax credits are how a GST/HST registrant gets back the GST or HST it paid on business purchases. If you paid $1,040 of HST on $8,000 of equipment in Ontario, and the equipment is for your business, you can claim that $1,040 on line 106 of your GST/HST return.
How do input tax credits work?
As a GST/HST registrant, you recover the GST/HST paid or payable on your purchases and expenses related to your commercial activities by claiming input tax credits (ITCs) on line 106.
Input tax credits, Canada Revenue Agency, canada.ca
You charge GST/HST on your sales and pay it on your costs. The ITC lets you subtract the tax you paid from the tax you collected, so you send the CRA only the difference. If you paid more than you collected, the CRA owes you the balance.
Take a registered Ontario business that sells $20,000 of taxable goods in a quarter and buys $8,000 of supplies. It collects $2,600 of HST and paid $1,040. It remits $1,560. Without the credit it would remit the full $2,600, which is why missing receipts cost real money.
The GST/HST calculator gives the tax on any price in your province, and the HST reverse calculator pulls the tax out of a receipt total when the receipt doesn’t break it down.
Who can claim an input tax credit?
You must be registered for GST/HST when the tax was paid, and the purchase must be for your commercial activities. Registration is required once your taxable revenues pass $30,000 in a single calendar quarter or over four calendar quarters in a row, and some businesses register earlier by choice to start claiming.
That’s a real reason to register voluntarily. A new business spending heavily on equipment and inventory can be owed money from day one, but only if it’s registered.
Think of Aisha, who opens a small bakery in Mississauga and spends $25,000 on ovens and fit-out before selling a cupcake. If she registers before she buys, the HST on those purchases comes back to her as credits on her first return, so she isn’t out that cash for long. A new registrant can sometimes claim on capital property and inventory still on hand the day she registers, but the rules are narrower, so she’d want to check the CRA page before counting on it.
What can’t you claim?
The CRA lists several exclusions, and they come up more often than people expect.
| Purchase | Can you claim the GST/HST? |
|---|---|
| Supplies for your taxable business sales | Yes |
| Personal use or enjoyment | No |
| Dues for a club whose main purpose is recreation, dining or sports | No |
| Supplies used to make exempt sales | No |
| Meals and entertainment | Only the allowable part |
| Some capital property | Restricted |
Check the CRA’s meals and entertainment rules for the exact percentage before you claim. Mixed-use items are the everyday trap. A phone or a vehicle you use half for work supports only the business share.
What proof do you need for an ITC?
The CRA sets documents by purchase size.
| Purchase | What the receipt must show |
|---|---|
| Under $100 | Supplier name, date, total amount |
| $100 to $499.99 | The above, plus the GST/HST paid or a statement that it’s included, and the supplier’s registration number |
| $500 or more | The above, plus your name, a description of what you bought and the payment terms |
You don’t send receipts in with an electronic return, but you must have them if the CRA asks. Records are kept for 6 years from the end of the year they relate to. Build that file as you go, since hunting for a receipt three years later is miserable.
How do you put it into practice?
Keep one folder, paper or digital, for every purchase that carried GST/HST. Each month, total the tax on those receipts and compare it with what your books show as GST/HST paid. If the two disagree, find out why before you file. A missing receipt found in March of the next year is easy to fix, and the same receipt found three years later may not be.
How long do you have to claim?
Most registrants have four years. The deadline is the due date of the return for the last reporting period that ends within four years after the period when the credit could first be claimed. Listed financial institutions and businesses over a $6 million threshold have two years, with exceptions for charities.
Four years is generous, but don’t count on it. The more time between purchase and claim, the harder the paper trail is to rebuild, and a supplier can close in the meantime.
Mistakes that cost people money
The common ones are claiming personal spending, claiming from a supplier who isn’t registered, and forgetting to claim at all. A forgotten claim on a few small receipts might only be a few bucks, but across a year it adds up. Another is treating provincial sales tax like GST/HST. Our GST and PST calculator shows both taxes on a price, but the ITC as described here covers the GST/HST only, so check the provincial rules on PST separately. Also note that the BC setting in that tool applies 12% to everything, so it overstates tax on items that carry less.
If your business also owes payroll amounts, the payroll remittance calculator covers those, since they don’t have anything to do with ITCs.
How we checked the figures
The credit rules, documentation levels, time limits and six-year record period come from CRA pages on input tax credits and GST/HST records. The HST rate for Ontario comes from the CRA’s rate table. We rechecked them on 29 September 2026. We’re an independent site, and no government body is behind it. The CRA page on input tax credits was last dated October 14, 2026 in its page details. All official pages were checked in November 2026.
Frequently asked questions
What is an input tax credit?
An input tax credit lets a GST/HST registrant recover the GST/HST paid or payable on purchases and expenses for its commercial activities. You claim it on line 106 of the GST/HST return, which reduces the tax you remit or raises the refund the CRA owes you.
Can I claim GST/HST on personal purchases?
No. The CRA excludes tax paid on goods and services for personal consumption or enjoyment, and on dues for clubs whose main purpose is recreation, dining or sports. If an item is mixed use, such as a phone, you can support only the business share of the tax.
How long do I have to claim an input tax credit?
Most registrants have four years, counted to the due date of the return for the last reporting period ending within four years after the credit first became available. Listed financial institutions and businesses over a $6 million threshold generally have two years, with exceptions the CRA lists.
What receipt do I need for a $600 purchase?
For $500 or more the CRA wants the supplier name, the date, the total, the GST/HST amount and the supplier's registration number, your name, a short description of what you bought and the payment terms. You do not send receipts with an electronic return, but you must have them if asked.
How long should I keep my GST/HST records?
Keep them for six years from the end of the year they relate to, and longer if the CRA asks. Keep the invoices behind every input tax credit, because a claim you cannot support with a receipt can be reversed in a review.
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