The Co-operative Education Tax Credit is a refundable tax credit. It is available to employers who hire students enrolled in a co-operative education program at an Ontario university or college.
The tax credit is based on salaries and wages paid to a student in a co-operative education work placement. Corporations can claim 25 per cent of eligible expenditures (30 per cent for small businesses). The maximum credit for each work placement is $3,000. Most work placements are for a minimum employment period of 10 weeks up to a maximum of four months.
Ontario businesses that hire students enrolled in a post-secondary co-operative education program are eligible for the tax credit.
Corporations may claim the tax credit on Schedule 550 and file it with their T2 Corporation Income Tax Return.
Employers operating unincorporated businesses may claim the credit on Form ON479, Ontario Credits, included in their personal income tax return.
Members of partnerships claim their share of the credit on their own corporate or personal tax returns.
Save a copy of the letter of certification you receive from the student’s university or college. You do not need to submit it with your tax return. But you will need to keep it for at least 7 years, 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 letter of certification needs to include:
The Canada Revenue Agency administers the tax credit on behalf of Ontario through the federal income tax system.