Training tax credit for employers
Highlights
The training tax credit program is designed to support your business by providing refundable income tax credits for employing apprentices. This program can significantly reduce your tax burden while investing in the future of your workforce. By participating, you can claim credits for eligible salaries and wages paid to apprentices enrolled in both Red Seal and non-Red Seal programs through SkilledTradesBC.
Key Benefits:
- Basic Credit: Claim up to 20% of eligible salary and wages for the first 24 months of non-Red Seal programs, up to $4,000.
- Completion Credit: Earn up to 15% of eligible salary and wages for completing levels 3 and 4 in both Red Seal and non-Red Seal programs, up to $2,500 and $3,000 respectively.
- Enhanced Credit: Additional 50% of the basic or completion credit for employing First Nations individuals or persons with disabilities, increasing your total credit up to $6,000.
Why Apply?
- Financial Relief: The credits are refundable, meaning you can receive a refund even if your tax payable is zero.
- Easy Qualification: If your business operates in B.C. and employs apprentices registered with SkilledTradesBC, you likely qualify.
- Support Workforce Development: Investing in apprentices helps build a skilled workforce, ensuring your business remains competitive and sustainable.
Applying for this program is straightforward and can provide substantial financial benefits, making it a valuable opportunity for your business.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- This is a refundable tax credit, meaning you can receive a refund if the credit exceeds your income tax payable.
- There are no repayment terms or interest rates as this is not a loan.
Eligible Expenses:
- Eligible salary and wages paid to apprentices enrolled in apprenticeship programs administered through SkilledTradesBC.
- Gross amount paid, excluding profits, bonuses, employee benefits, stock options, or unpaid amounts as described in section 78(4) of the federal Income Tax Act.
- Government and non-government assistance excluded.
Ineligible Expenses:
- Profits, bonuses, employee benefits, stock options, or unpaid amounts.
- Any assistance received from government and non-government sources.
Fees:
- There are no fees associated with claiming this tax credit.
Qualifications
- Must be a sole proprietor, partnership, or corporation.
- Must be subject to B.C. income tax for the taxation year the credit is being claimed.
- Resident in B.C. on the last day of the taxation year, or
- Corporation that maintained a permanent establishment in B.C. at any time in the taxation year.
- Employees must be employed in a position:
- In a business carried on in B.C. during the taxation year.
- Related to the program they are registered in through SkilledTradesBC.
If part of a partnership, must be an active member engaged in a business similar to the partnership.
Disqualifications:
- Corporations exempt from tax under section 27 of the Income Tax Act.
- Corporations with taxable income exempt under Part 1 of the federal Income Tax Act.
- Corporations directly or indirectly controlled by an entity exempt for the above reasons.
- Limited partners in a partnership.
Description
This program offers refundable income tax credits for businesses that employ apprentices in programs managed by SkilledTradesBC. You can receive credits for the salaries and wages you pay to eligible apprentices.
Here's what you can get:
- Basic Credit: For the first 24 months of a non-Red Seal apprenticeship, you can claim 20% of eligible salary and wages, up to $4,000.
- Completion Credit: For both Red Seal and non-Red Seal programs, you can claim 15% of eligible salary and wages, up to $2,500 for level 3 and $3,000 for level 4.
- Enhanced Credit: If you employ First Nations individuals or persons with disabilities, you can get an additional 50% of the basic or completion credit, up to $2,000 for the basic credit, $1,250 for level 3, and $1,500 for level 4.
Why this matters to your business:
- Financial Support: The tax credits help offset the costs of training apprentices, making it more affordable to develop skilled workers.
- Flexibility: You can claim multiple credits in a year for an employee, provided they meet the requirements.
- Extended Period: The program has been extended to December 31, 2027, giving you ample time to benefit from these credits.
This program is a valuable opportunity to reduce your tax burden while investing in the future of your workforce.
Program Steps
Gather Required Documentation:
- Copy of your employee’s transcript from SkilledTradesBC.
- Copy of the certificate your employee received if they graduated from the program.
- If claiming an enhanced tax credit for a First Nations individual, a copy of their Certificate of Indian Status card.
- If claiming an enhanced tax credit for a person with disabilities, proof of entitlement.
Complete the Appropriate Tax Credit Form:
- Corporations: Complete Schedule 428, British Columbia Training Tax Credit, and submit it with your T2 Corporation Income Tax Return.
- Individual Employers: Complete the British Columbia Training Tax Credit (Employers) form (T1014-1) and submit it with your T1 Individual Income Tax Return.
Calculate Eligible Salary and Wages:
- Determine the eligible salary and wages paid to the apprentice during the eligible period.
- Exclude profits, bonuses, employee benefits, stock options, and unpaid amounts as described in section 78(4) of the federal Income Tax Act.
Claim the Basic Tax Credit:
- Ensure the apprentice is registered in a non-Red Seal program.
- Claim 20% of eligible salary and wages up to $4,000 for the first 24 months of the apprenticeship agreement.
Claim the Completion Tax Credit:
- Verify that the apprentice has completed level 3 or level 4 of a Red Seal or non-Red Seal program.
- Claim 15% of eligible salary and wages up to $2,500 for level 3 and up to $3,000 for level 4.
Claim the Enhanced Tax Credit:
- If applicable, claim 50% of the basic or completion tax credit for First Nations individuals or persons with disabilities.
- Ensure you have the necessary documentation to support the enhanced tax credit claim.
Submit the Application:
- Submit the completed forms and required documentation with your annual tax return.
- Ensure all claims are made no later than 36 months after the end of the tax year for which the eligible salaries and wages were paid.
Review and Follow Up:
- Keep copies of all submitted documents and forms.
- Follow up with the tax authorities if you have any questions or need further clarification on your claim.
