Note: EHT Annual Returns are printed with account-specific information for each employer. Since the Ministry's high-speed processing equipment is unable to read reproduced, downloaded or generic returns, we request that employers contact the Ministry so that we may issue a new return with your pre-printed information. For a list of Ministry of Revenue tax offices, please check the blue pages of your telephone directory.

Due March 15, 2008

This guide can also be used to complete the 2000 through 2006 EHT Annual Returns.

Things to remember

• Complete both parts of the Annual Return and do not separate the bottom portion (Payment Advice) from the top portion (Annual Return).
• Financial institutions are not authorized to accept or process Annual, Special or Final Returns.
• Ensure that your Annual Return is received by the Ministry of Revenue by March 17, 2008 to avoid a late-filing penalty and interest charges.
• Since the due date of March 15, 2008 falls on a Saturday, Annual Returns received by Monday, March 17, 2008 will be considered delivered by the due date.
• Penalties of up to 17 per cent of the tax owing are imposed on late-filed returns and escalate to a maximum of 50 per cent for repeat late filers. For further information, refer to EHT Information Bulletin 1-05 Penalties and Fines.
• All associated employers must complete the enclosed Schedule 2 – Associated Employers Exemption Allocation. For further information, refer to EHT Information Bulletin 1-98 Associated Employers.

Who needs to file an Annual Return?

• Eligible employers whose Total Ontario Remuneration is greater than their exemption amount for 2007.
• Employers who are not eligible for the exemption.
• Eligible employers who were members of an associated group on December 31, 2007.
• Employers who have remitted EHT instalments for 2007.
• All employers who were mailed 2007 EHT Annual Returns.

The filing of the Annual Return will allow the ministry to update its files and to issue a refund if required.

Filing your Annual Return

• Use only original Annual Return forms supplied by the Ministry of Revenue. Additional forms are available from any ministry tax office listed on the last page of this guide. EHT Annual Returns are not available on the ministry website.
• Verify the pre-printed name and address on the top portion of the form. If changes are required, please call any ministry tax office listed on the last page of this guide.

Special and Final Returns

• Employers who pay all of their Gross Total Ontario Remuneration in one month of a calendar year are required to file a Special Return within 15 days following the month in which the remuneration was paid.
• An employer who ceases to have employees or a permanent establishment in Ontario, or who has amalgamated, must advise the ministry and file a Final Return, within 40 days of the business closure date.
• A corporation’s change in ownership does not require a Final Return.

How to complete your EHT Annual Return

Line numbers below refer to the line numbers on the Annual Return.

Employer Type

All three sections must be completed. If any section is incomplete, you will NOT be considered eligible for the tax exemption.

Mark an X in either the Yes or No box to indicate your employer type as of December 31, 2007.

In general, a public sector employer means an employer who is exempt from federal income tax and includes all levels of government, universities, colleges, school boards and hospitals. Public sector employers are not eligible for the tax exemption.

Employment Income

Enter the Ontario portion of employment income from box 14 of your federal T4 Summary on this line, rounded to the nearest dollar. All employers must complete this section.

Note: This information is required for administrative purposes and this amount may be different from remuneration that is subject to EHT.

EHT Calculation

Line 1: Gross Total Ontario Remuneration

Enter the Gross Total Ontario Remuneration for all employees from January 1, 2007 to December 31, 2007, rounded to the nearest dollar. Do not include cents.

Reminder: If the total exceeds $600,000, monthly instalments are required in 2008.

Line 2: Exemption

Non-eligible Employers

Enter 0 on line 2 and proceed with the completion of your Annual Return.

Eligible Employers Who Are Not Associated

Enter 400,000 if you were an eligible, single account employer for the full year.

Employers who are eligible for only part of the year (including the first or last year of business in Ontario, the year of bankruptcy, amalgamation or change in eligibility status), must prorate the exemption. Multiply $400,000 by the number of days in the calendar year that you had both a permanentestablishment in Ontario and Total Ontario Remuneration, and divide the product by 365.

An eligible employer with multiple accounts must designate one account to complete and submit Schedule 1 – Multiple Accounts, which is found on the reverse of the Annual Return. Instructions for completing Schedule 1 are found on page 3 of this guide. Each account must file a separate Annual Return and enter the amount of the exemption allocated to it from column C of Schedule 1.

Eligible Employers Who Are Associated

Complete Schedule 2 – Associated Employers Exemption Allocation (enclosed). Schedule 2 is used to calculate and allocate the exemption available to the associated group for the year. Instructions for completing Schedule 2 are found on page 3 of this guide.

Line 3: Taxable Total Ontario Remuneration

Subtract line 2 from line 1 to determine your Taxable Total Ontario Remuneration. If the result is negative, enter 0 on this line as you do not owe any EHT for 2007.

Certify and return your 2007 EHT Annual Return in the preaddressed envelope to confirm your filing status.

Line 4: Tax Rate

If you are an associated employer or a single account employer, the tax rate is based on line 1 . If you are a multiple accounts employer, use the tax rate applicable to the sum of the Gross Total Ontario Remuneration for all of your EHT accounts.

Using the following table, enter the applicable tax rate.

Gross Total Ontario Remuneration	Tax Rate
Up to $200,000	0.98%
$200,001 to $230,000	1.101%
$230,001 to $260,000	1.223%
$260,001 to $290,000	1.344%
$290,001 to $320,000	1.465%
$320,001 to $350,000	1.586%
$350,001 to $380,000	1.708%
$380,001 to $400,000	1.829%
Over $400,000	1.95%

Line 5: Total Tax Payable

Multiply line 3 by line 4 and enter the result on line 5 .

Line 6: Tax Payments made for the Tax Year

Enter the total of all tax payments (excluding any amounts paid for interest and penalties) that you made for the year beginning with the payment due on February 15, 2007 and ending with the payment due on January 15, 2008. Include in your calculation any credit amount that has been used to reduce a payment during the year. Please contact the nearest tax office to verify any additional credit amounts you may be considering.

Note: Any request for information regarding your total tax payments or adjustments for the year must be made in writing.

Line 7: Balance Due/Refund

Subtract line 6 from line 5 and enter the result on line 7 . A positive amount indicates there is a balance owing; a negative amount indicates an overpayment which may be credited to the current year or refunded.

Payment Enclosed, Credit to Current Year, or Refund

Mark the appropriate box with an X. If the balance is NIL, leave the boxes blank.

Payment enclosed: Complete the Payment Advice – EHT Annual Return section and enclose a cheque or money order in Canadian funds, payable to the Minister of Finance. Please write your EHT account number on the back of the cheque. Do not send cash.

Credit to current year: Mark this box if the overpayment is to be applied to 2008.

Refund: Mark this box if a refund cheque is required.

Certification

This section must be completed and signed by the employer, an authorized officer of the employer, or a third party (e.g., payroll service provider) holding a proxy.

The proxy is not to be sent with the Annual Return, but it must be available if requested by the ministry.

Schedule 1 – Multiple Accounts

This schedule, found on the reverse of the Annual Return, must be completed by multiple accounts employers and submitted with the Annual Return of one of the accounts designated by the employer.

Column A: Enter all account numbers of the multiple accounts employer.

Column B: Enter the 2007 Gross Total Ontario Remuneration for each account.

Column C: Enter the exemption amount to be allocated to each account. A multiple accounts employer may allocate the exemption to any of its multiple accounts to the extent that the sum of the amounts does not exceed the employer's allowable exemption.

A multiple accounts employer that is associated must first take its total allowable exemption amount from column E of Schedule 2.

Each account will enter its Allocated Exemption Amount from column C of Schedule 1 on line 2 of its Annual Return.

Column D: Subtract the amount in column C from the corresponding amount in column B.

Schedule 2 – Associated Employers Exemption Allocation

Column A: Enter the EHT account number (or legal name if there is no EHT account number) for each of the associated employers within the group, with permanent establishments in Ontario. An associated employer that is also a multiple accounts employer should enter only the EHT account number designated by the employer to complete and submit Schedule 1 – Multiple Accounts.

Note: Multiple accounts are treated as one EHT account on Schedule 2.

The associated group includes all employers associated on December 31 and all employers who were associated during the year, but ceased to have Total Ontario Remuneration and/or a permanent establishment in Ontario, during the year.

Column B: Enter the 2007 Gross Total Ontario Remuneration of each of the associated employers. If one of the associated employers is also a multiple accounts employer, the Gross Total Ontario Remuneration (total of column B of Schedule 1 – Multiple Accounts) must be entered for that employer.

Note: An associated company with a permanent establishment in Ontario and no Ontario payroll must write zero in this column and give reasons; e.g., holding company.

Column C: Enter the number of days that each employer had Ontario remuneration and a permanent establishment in Ontario.

Column D: Divide each number in column C by 365 and multiply the result by the total exemption available for the year ($400,000). This will give the maximum exemption available to each employer.

Column E: Transfer the value from the account with the largest number in column D to the Total Available Exemption Amount at the bottom of column E. From this amount, allocate an exemption amount to each employer in the group. The amount for any specific employer in the group cannot exceed the amount in column B or D that corresponds to that employer.

An associated employer with a single EHT account should enter its allocated exemption amount from column E on line 2 of its Annual Return.

An associated employer with multiple EHT accounts should enter its allocated exemption amount from column E as the Total of column C of Schedule 1 (found on the reverse of the annual return).

Column F: Subtract column E from column B and enter the result in column F.

Column G: An authorized officer for each employer within the associated group must sign this column to authorize the exemption amount allocated to each of them.

Enquiries

For enquiries regarding EHT, please contact any Ontario Ministry of Revenue Tax Office.

For general information, please refer to the Guide for Employers and information bulletins available at all Ministry of Revenue tax offices or any of the following:

• Toll-free 1 866 ONT-TAXS (1 866 668-8297)
• Teletypewriter (TTY) 1 800 263-7776
• Website ontario.ca/revenue

© Queen's Printer for Ontario, 2007

ISBN 978-1-4249-5258-8