Insights
Nov 12, 2025
Mackisen
How to Claim the 1% Quick Method Credit on GST Remittances
Introduction
For small businesses in Quebec, the Quick Method of Accounting can be a powerful way to simplify GST/QST filings and improve cash flow. Instead of claiming individual Input Tax Credits (ITCs) on every expense, the Quick Method allows eligible businesses to remit only a portion of the GST/QST collected effectively keeping part of the tax as income.
One of the biggest advantages is the 1% Quick Method Credit on GST remittances. This credit lets you reduce the amount of tax you remit to the government, increasing your profitability while maintaining full compliance.
At Mackisen CPA Montreal, we’ve helped countless businesses set up, calculate, and claim the 1% credit correctly. This guide explains how the Quick Method works, who qualifies, and how to apply the 1% credit legally and effectively.
Legal and Regulatory Framework
The Quick Method of Accounting is established under:
Excise Tax Act (Canada) s. 227(1) — authorizes simplified GST reporting for small businesses.
Excise Tax Act Regulations (Part IX, Division V.1) — outlines the Quick Method calculation rules and eligibility.
Taxation Act (Quebec) s. 407 and Regulation 107R4 — sets out the QST Quick Method structure for Quebec registrants.
These laws allow eligible businesses to remit a fixed percentage of GST/QST collected on sales rather than calculating ITCs for every purchase. The 1% credit reduces that remittance even further.
Eligibility for the Quick Method
You can use the Quick Method if:
Your annual worldwide taxable revenues (including zero-rated supplies) do not exceed $400,000 in the last four consecutive quarters.
Your business provides services or sells goods to consumers (e.g., consulting, retail, trades, or professional services).
You are not a financial institution, listed financial service provider, or charity using the special quick method.
Once registered, you must stay on the Quick Method for at least one year before opting out.
How the Quick Method Works
Under the Quick Method:
You continue to charge customers 5% GST and 9.975% QST on sales.
Instead of remitting all of it, you remit a reduced rate to CRA and Revenu Québec—keeping the difference as a profit allowance.
The reduction compensates for not claiming ITCs or ITRs on most expenses.
The remittance rates vary by province and business type. For Quebec service businesses, the combined rate is typically around 8.8% on taxable sales (including GST/QST collected).
Then, you also claim the 1% Quick Method Credit on the first $30,000 of eligible sales each fiscal year.
Step-by-Step: How to Claim the 1% Quick Method Credit
Register for the Quick Method
Log into your CRA My Business Account and choose “Elections” → “Quick Method of Accounting for GST/HST.”
For QST, log into Revenu Québec’s Mon Dossier and file form FP-2074, Election to Use the Quick Method of Accounting for QST.
The election takes effect on the first day of the reporting period you specify.
Apply the Quick Method Rates to Your Sales
Calculate your GST and QST on customer invoices as usual (5% and 9.975%).
When filing, use the Quick Method percentage for your remittance instead of the actual tax collected.
Example: A consulting firm collects $14.975 on $100 of sales but remits approximately $8.8.
Claim the 1% Quick Method Credit
Deduct 1% of the first $30,000 of eligible taxable sales from your GST remittance.
You claim this credit directly on your GST return (line 108) and QST return (line 209) for the period when the sales occurred.
The maximum credit is $300 per year ($30,000 × 1%).
Adjust for Mixed Revenues
If you sell both taxable and exempt goods/services, apply the Quick Method only to the taxable portion.
Exempt sales (e.g., residential rent or financial services) are excluded.
File and Retain Records
Submit your GST and QST returns online through CRA’s My Business Account and Revenu Québec’s Mon Dossier.
Keep detailed sales records showing how the 1% credit was calculated.
Jurisprudence and CRA/ARQ Policy References
While few court cases focus specifically on the Quick Method, several rulings emphasize accurate documentation:
Canderel Ltd. v. Canada (SCC 1998) — all reported income and deductions must reflect economic reality.
Hickman Motors Ltd. v. Canada (SCC 1997) — taxpayers bear responsibility for proving compliance with remittance rules.
Royal Bank of Canada v. The Queen (FCA 2012) — calculation errors and missing records can invalidate claimed credits.
CRA’s policy statement P-124 confirms that the Quick Method credit applies only when accurate records prove eligibility and timely election.
Documentation: How to Support Your 1% Credit Claim
Keep the following documentation for six years:
Quick Method election confirmation letters from CRA and Revenu Québec.
Sales summaries showing total taxable sales and 1% credit calculation.
Copies of GST/QST returns with credit applied.
Bank and accounting records matching tax collected and remitted.
Mackisen CPA builds automated documentation templates in QuickBooks or Sage for clients using the Quick Method, ensuring all credits are properly calculated and backed by evidence.
How CRA and Revenu Québec Review Quick Method Credits
During an audit, both agencies will verify:
That your business is registered under the Quick Method for the entire period.
That annual taxable revenues remain below $400,000.
That the 1% credit was claimed on eligible sales only.
That your bookkeeping and filing support the credit claim.
If documentation is incomplete or the election was not filed properly, CRA or ARQ may deny the credit retroactively.
Winning With CRA and Revenu Québec
At Mackisen CPA Montreal, we help you maximize savings while staying compliant. Our five-step system ensures flawless credit claims:
Eligibility Assessment – We confirm that your revenue and business type qualify.
Registration and Election – We handle CRA and ARQ filings for Quick Method registration.
Rate and Credit Calculation – We calculate remittance rates and the 1% credit accurately.
Documentation and Filing – We prepare audit-ready GST/QST returns with proper records.
Audit Representation – If questions arise, our tax lawyers respond directly to CRA or ARQ on your behalf.
Mackisen Service Hub: Simplifying Small Business Taxes
Our Mackisen Service Hub helps small and medium-sized Quebec businesses streamline GST/QST reporting. We provide:
Quick Method setup for both CRA and Revenu Québec.
Automated 1% credit calculation and tracking.
Full bookkeeping integration with QuickBooks or Xero.
Ongoing compliance monitoring and audit defense.
Our CPA auditors and tax lawyers graduates of McGill, Université de Montréal, and Concordia University combine legal accuracy with practical experience to ensure you benefit fully from every tax credit available.
Real Client Example
A Montreal graphic design firm earning $280,000 annually was filing under the regular GST/QST method. Mackisen CPA reviewed their filings, registered them for the Quick Method, and claimed the 1% credit on the first $30,000 of sales. The firm saved over $4,800 in taxes in the first year and simplified its filings to a one-page summary per quarter.
Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal is Quebec’s trusted advisor for Quick Method registration, calculation, and compliance. We ensure your GST/QST remittances are simplified, your 1% credit is maximized, and your records are 100% audit-ready.
When you use the Quick Method with Mackisen, you’re not just filing smarter—you’re building a more profitable, efficient, and compliant business.
