Apprentice Tax Credit

tax

If you have apprentices working for you, then you should be taking advantage of the apprenticeship job creation tax credit. (Apprentice Tax Credit)

An investment tax credit can be claimed on eligible salaries paid to eligible apprentices. The credit is equivalent to 10% of salaries and wages paid to that individual, to a maximum of $2,000 per year, per apprentice.

What’s needed to qualify for the apprentice tax credit:

In order to claim the credit, the following requirements must be met:

  • The apprentice must be working in a prescribed trade. See Red Seal for a list of trades that qualify.
  • The individual must be in year 1 or 2 of their apprenticeship contract. The contract must be registered federally or provincially, under an apprenticeship program designed to certify or license individuals in the trade.
  • Wages paid are included in the calculation of the credit. However, bonuses or taxable benefits given to the apprentice, such as for the personal use of a company vehicle are not included.

 

For corporations, the apprentice tax credit is claimed on the T2 Schedule 31. If you are self-employed, the credit is claimed on Form T2038. Any unused apprenticeship tax credits can be carried back 3 years or forward 20 years.

If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to Stephanie Kwan of KWB Chartered Accountants for providing this content.

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