In the 2015 Ontario Budget, the government announced several changes to the Apprenticeship Training Tax Credit. The proposed changes were enacted through Bill 91, Building Ontario Up Act (Budget Measures), 2015 which received Royal Assent on June 4, 2015. Learn more about the Ontario Budget [PDF] .
The apprenticeship training tax credit is a refundable tax credit. It is available to employers who hire and train apprentices in certain skilled trades during the first 36 months of an apprenticeship program that commenced on or after April 24, 2015.
For apprenticeship programs that commenced before April 24, 2015, for eligible expenditures incurred after March 26, 2009, the first 48 months of the apprenticeship program qualify for purposes of the tax credit.
The tax credit is based on salaries and wages paid to an apprentice. Qualifying businesses can claim 25 per cent of eligible expenditures (30 per cent for small businesses) made during the first 36 months of an apprenticeship program that commenced on or after April 24, 2015. The maximum credit for each apprenticeship is $5,000 per year. The maximum credit over the first 36‑month period of the apprenticeship is $15,000.
The tax credit is available to businesses that:
There are over 150 skilled trades in Ontario in four sectors: construction, industrial/manufacturing, motive power and service. Over 120 of these trades are currently eligible for the tax credit.
Corporations may claim the tax credit on Schedule 552 and file it with their T2 corporation income tax return.
Employers operating unincorporated businesses may claim the tax credit on form ON479, Ontario Credits, included in their personal income tax return.
Members of partnerships claim their share of the tax credit on their own corporate or personal tax returns. Limited partners cannot claim the tax credit. But, general partners of a limited partnership can claim their share of the tax credit.
Note: It is important to file your return as a completed package. Incomplete returns generate delays in processing.
Save your company's payroll records and the training agreement or contract of apprenticeship. You do not need to submit them with your tax return. But you will need to keep them should you be asked to provide documentation to support your tax credit claim.
If you are unable to provide supporting documentation when requested, your claim may be rejected.
The employer and apprentice must be participating in an apprenticeship program in which the training agreement or contract of apprenticeship has been registered under the Ontario College of Trades and Apprenticeship Act, 2009 or a predecessor of that Act (i.e. Apprenticeship and Certification Act, 1998 or Trades Qualification and Apprenticeship Act) for each eligible apprenticeship.
If an apprentice changes employers, the new employer and apprentice need to sign a new training agreement. Before signing this document, it is important that the employer request and obtain a copy of the original training agreement or contract of apprenticeship.
These documents are used to substantiate claims and to verify the eligible apprenticeship period.
If you have lost or misplaced the training agreement or contract of apprenticeship, please request a copy from the apprentice or the Ministry of Training, Colleges and Universities at 1 800 387-5656. If you are not a party to the original training agreement or contract, you will need the apprentice to obtain this document on your behalf. Or, you may ask the apprentice to provide you with written permission to make this request. There are no substitutes for either document.
Three government bodies administer the tax credit.
The Canada Revenue Agency (CRA) administers the tax credit on behalf of Ontario through the federal income tax system. The CRA provides administrative support related to filing claims such as forms distribution, verification and audit functions, and interpretations and rulings.
The Ontario Ministry of Training, Colleges and Universities promotes the apprenticeship program to employers and the general public, and is responsible for registering eligible apprentices. For more information on hiring apprentices, call Employment Ontario at 1 800 387‑5656 (1 866 533‑6339 for teletypewriter).
The Ontario Ministry of Finance evaluates service delivery and performance related to the administration of this credit, issues general information, sets overall policy and is responsible for the tax credit's legislation.