Rebate money is revenue, however the cheque routes
Whatever a program pays and whoever it pays it to, the full contract price of the install is your revenue, and HST is generally calculated on all of it. Programs churn constantly: Enbridge's HER+ intake, federal heat-pump incentives and municipal top-ups have each opened, closed or changed shape in recent years, while the filing treatment has stayed put.
Two flows cover nearly every job:
- The homeowner claims the rebate. You invoice and collect full price; the rebate is between the customer and the program. Nothing unusual lands on your return, but keep the program paperwork you signed, because it names your company and your registrations.
- You front the rebate. The customer pays the after-rebate price, assigns the claim, and the program reimburses you. That reimbursement is not miscellaneous income and not a discount on your equipment cost; it is the remainder of the consideration for a taxable install. Booking only what the customer paid understates revenue, and it usually understates HST with it.
We also age program receivables like any other AR. Administrators pay slowly, and a claim denied after the equipment is on the wall is a real cost that belongs in the month it happens, not a mystery variance at year-end. Keep the energy-advisor reports and program approvals with the job file: when a rebate line is questioned, the review is won or lost on that paperwork, and it is nearly impossible to reconstruct two winters later.
Warranty work is three numbers, not one
A warranty call usually produces a parts credit from the manufacturer, a labour reimbursement at the manufacturer's set rate, and sometimes a customer charge for what the warranty does not cover. Each behaves differently on the returns.
The labour reimbursement is payment for a repair service you supply to the manufacturer, which is a taxable supply with HST to account for, not a contra entry against wages. Parts credits need matching claim by claim so denials surface instead of vanishing into cost of goods sold. And because warranty rates sit below your retail rate, warranty work deserves its own revenue line: a shop running heavy warranty volume can look fully booked while earning less per hour than the service board suggests.
Labour warranties you sell yourself are the mirror image. Money collected today for coverage promised over ten years is unearned when it lands, and the return should reflect that; the deferred-revenue mechanics live with the maintenance-plan treatment on our accounting page.
Where each dollar lands
The map most HVAC owners want on one page:
| Money in | HST return | Corporate return |
|---|---|---|
| Install billed to a homeowner | 13% on the full price | Revenue as the work is done |
| Rebate you fronted and were reimbursed | Part of the consideration for the same taxable install | Job revenue, not a cost recovery |
| Manufacturer warranty labour | Taxable supply to the manufacturer | Service revenue at warranty rates |
| Holdback released by a GC | Tax on the held-back portion is due when it becomes payable, not when first invoiced | Income when it becomes receivable under the contract |
The T2 and the HST return, filed like a trade business
A CCPC's first $500,000 of active income is taxed at roughly 12.2% combined in Ontario, and keeping that rate is mostly clean, on-time filing, which is the core of our Corporate Tax Filing work. Heavy equipment quarters can push an HST period into a refund position, and refund returns attract pre-assessment review, so we file them with the input tax credit trail ready: supplier invoices with valid HST numbers, captured as the bills arrive rather than hunted in the spring.
Two quieter settings earn their keep. We match the GST/HST filing frequency to the cash pattern instead of accepting the default, and we point the fiscal year-end at a shoulder month so T2 preparation never collides with your install season. The slip calendar rounds it out: T4s for techs by the end of February, and T5018s for subcontracted work due six months after year-end for businesses whose primary activity is construction, which an install-led HVAC company usually is.
Owners and letters
We prepare the owners' personal returns alongside the T2 so salary, dividends, instalments and slips reconcile across both files. When the CRA writes, and in this trade the letters are usually HST refund reviews or T5018 matching queries, CRA Audit & Review Support answers from our own working papers, which is why most letters end at the first response.
Source: CRA — GST/HST for businesses.
