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Apprenticeship Tax Credits: New Federal and Provincial Incentives for Employers

There are substantial financial incentives from both the provincial and federal governments available for apprentices who complete both Level and Red Seal certifications. The key is to know how to navigate your way through the forms and requirements and we hope the following guide will provide you with the information to successfully do that. And time is of the essence as the BC Training Tax Credit will expire on December 31, 2011.

1. Apprenticeship Job Creation Tax Credit

Description: A non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices in respect of employment after May 1, 2006

Who Qualifies: Any business that hires an “eligible apprentice”

Eligible Apprentice: someone working in a prescribed trade (a trade that is currently listed as a Red Seal Trade – Professional Cook 1 and 2, Baker) in the first two years of their apprenticeship contract.; contract must be registered with a federal, provincial or territorial government under an apprenticeship program designed to certify or license individuals in the trade; in BC, the Industry Training Authority (ITA).

Amount: The maximum credit is $2,000 per year for each eligible apprentice

Click here for full details including eligibility and instructions: Apprenticeship Job Creation Tax Credit

Links to Canada Revenue Agency:

2. British Columbia Training Tax Credit

Description: Effective January 1, 2007, the BC Training Tax Credit consists of a Basic Tax Credit and a Completion Tax Credit based on the salary and wages an employer pays an eligible apprentice in the first 24 months of an industry training agreement; up to $6,500 in fully refundable tax credits for apprentices as they progress through training.

Who Qualifies:

  • An individual who resided in BC on the last day of the taxation year
  • A corporation that maintained a permanent establishment at any time in the taxation year
  • An individual or corporation that is an active member of a partnership, you may claim your proportionate share of the partnership’s tax credit

Amount:

Basic Tax Credit:

  • Based on the salary and wages paid to an eligible apprentice
  • Non-Red Seal programs (Meatcutter)
  • First 24 months of an industry training agreement timeframe
  • Is equal to the amount that is the lesser of:
    • $2,000, and
    • 10% of the salary and wages paid to a registered apprentice in an eligible recognized program

Completion Tax Credit:

  • Based on the salary and wages paid to an employee who has completed level 3 or higher of an eligible training program on or after, January 1, 2007
  • Includes Inter-provincial (Red Seal) and BC recognized (non-Red Seal) programs
    • Cook Level 3 (Red Seal), Professional Cook 3 (Red Seal), Baker Level 3 (Red Seal) and Meatcutter Level 2
  • Is equal to the amount this is the lesser of:
    • $2,500, and
    • 15% of the salary and wages paid to a registered apprentice in an eligible recognized program within the 12 month period ending on any day of the month that the employee completed Level 3

Click here for full details including eligibility and instructions: BC Training Tax Credit

Link to Forms:

Related Information: 
Developing Your People

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