What are input tax credits and how do I claim them as self-employed in Ontario?

If you are registered for HST, you can claim input tax credits (ITCs) to recover the HST you paid on business purchases and expenses. This is one of the main advantages of HST registration — you collect HST from clients and remit the net amount (HST collected minus ITCs) to the CRA.

For example, if you collect $1,300 in HST from clients and paid $200 in HST on business supplies, you remit $1,100 to the CRA rather than the full $1,300. ITCs are available for business-use expenses; if an expense is partially personal, only the business-use fraction of the HST qualifies for an ITC.

To claim ITCs, you must have valid documentation — generally, you need receipts or invoices from HST-registered suppliers showing the supplier's HST registration number, the amount paid, and the HST charged. You report ITCs on your HST return. The CRA has specific documentation requirements depending on the size of the purchase, so keeping organized records with registration numbers and amounts is important for audit readiness.