Apprenticeship Job Creation Tax Credit
The Apprenticeship Job Creation Tax Credit is specific to Red Seal Trades and provides a non-refundable tax credit of up to 10 per cent of the eligible wages to a maximum of $2,000 per year for each apprentice for the first two years of their apprenticeship. Businesses across Canada can claim any unused credit back three years and forward 20 years.
An "eligible apprentice" is someone who is working in a prescribed trade in the first two years of their apprenticeship contract. This contract must be registered with a federal, provincial or territorial government under an apprenticeship program designed to certify or license individuals in the trade.
Apprenticeship Job Creation Tax Credit (AJCTC)
What is it?
This is a federal incentive program designed to help employers offset the cost of hiring and training employees who have entered into an apprenticeship contract.
What is the benefit to your company?
You can take advantage of a non-refundable tax credit equal to 10% of the eligible salaries and wages paid to apprentices. Any unused credit may be carried back 3 years and carried forward 20 years.
The maximum credit is $2,000 per year for each eligible apprentice.
There is also the added benefit of having higher skilled employees as part of your team.
Any business that hires someone working in a prescribed trade, in the first two years of their apprenticeship contract qualifies. Access a list of the prescribed trades currently listed as Red Seal Trades or check out the list below.
Salaries and wages paid by the employer to an eligible apprentice for the apprentices' employment in Canada during the first 24 months of the apprenticeship are eligible. The employment must have begun after May 1, 2006.
Remuneration based on profits, bonuses, and taxable benefits including stock options, and certain unpaid remuneration don't qualify.
How do I apply?
Claim the credit on your company's income tax returns, using either:
Form T2038(IND), Investment Tax Credit (Individuals)
Form T2SCH31, Investment Tax Credit – Corporations.
Forms can be ordered on-line at www.cra.gc.ca/forms or by calling 1-800-959-2221.
Where can I find more information?
The following forms and publications, will give you more information:
General Income Tax and Benefit Guide, Form T2038(IND), Investment Tax Credit (Individuals), Guide T4012, T2 Corporation – Income Tax Guide and Form T2SCH31, Investment Tax Credit – Corporations.
They are available on the Canada Revenue Agency (CRA) web site.
You can also call CRA's Business Enquiries line at 1-800-959-5525.