Training Tax Credit For Employers

The training tax credit provides refundable income tax credits for employers who employ apprentices enrolled in apprenticeship programs administered through the Industry Training Authority (ITA).

Learn about:

Eligibility

Sole proprietors, partnerships and corporations are eligible for the employer's tax credit.

You're eligible to claim the training tax credit if you're subject to B.C. income tax for the taxation year that the credit is being claimed. You're subject to B.C. income tax if you are either:

  • A resident in B.C. on the last day of the taxation year, or
  • A corporation that maintained a permanent establishment in B.C. at any time in the taxation year

Employees must be employed in a position that is:

  • In a business carried on in B.C. during the taxation year, and
  • Related to the program they are registered in through the ITA

If you're an active member of a partnership, you can claim your proportionate share of the partnership's tax credit. Being an active member of a partnership means that you're engaged in a business similar to the partnership. Limited partners aren't eligible to claim the credit.

You aren’t eligible to claim the training tax credit if you're a corporation that is exempt from tax under section 27 of the Income Tax Act or has taxable income that's exempt under Part 1 of the federal Income Tax Act. You also can't claim the tax credit if you're a corporation that is directly or indirectly controlled by an entity that is exempt for either of these reasons.

See a table of eligible programs and completion requirements (PDF) for employers. If your apprentice is enrolled in a program through the ITA that’s not listed, you may still be eligible for a training tax credit. Contact us for more information.

Salary and Wages

The training tax credit amount is calculated based on the amount of eligible salary and wages you pay to an eligible employee during the eligible period.

Eligible salary and wages are the gross amount you pay to an eligible employee in a taxation year, 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 is also excluded from eligible salary and wages.

Types and Amounts of Training Tax Credits

There are three types of training tax credits:  

  1. Basic credit for the first 24 months of non-Red Seal training programs
  2. Completion credit for level 3 or level 4 for both Red Seal and non-Red Seal training programs
  3. Enhanced credit for First Nations individuals and persons with disabilities

The federal government also provides a non-refundable credit for employers for the first 24 months of Red Seal apprenticeship programs.

Basic Tax Credit

You can claim the basic tax credit if your employee:

  • Has signed an industry training agreement under the Industry Training Authority Act
  • Is registered in a non-Red Seal program

The start date of the industry training agreement can be found on the employee's transcript issued by the ITA.

See how the basic tax credit applies in example 1 and example 2.

Basic Tax Credit Amounts

Non-Red Seal Programs
Within the first 24 months of industry training agreement 20% of eligible salary and wages up to $4000

Eligible Period

The eligible period is the part of the taxation year that’s within 24 months from the date the employee entered into the industry training agreement, and must be between January 1, 2007 and December 31, 2017.

Completion Tax Credit 

B.C.’s completion tax credit is available for both Red Seal and non-Red Seal apprenticeship programs. The completion credit requires the apprentice to complete level 3 or 4 of a program.

In order to complete the requirements for a completion tax credit level, the employee must either:

Different programs have different requirements for each tax credit level. See a table of eligible programs and completion requirements (PDF) for employers.

See how the completion tax credit applies in example 1, example 2 and example 3.

Work-based Hours

For programs where completion requirements are a certain number of work-based hours, an employee must complete the required work-based hours to complete that level. The hours recorded on their transcript must be the same as, or greater than, the number of hours required to complete a level. See the table of eligible programs and completion requirements (PDF) for information about which programs require work-based hours.

Work-based hours must be submitted to the ITA to claim the tax credits.

Specific Technical Training

For programs where employees are required to complete specific technical training to claim the tax credit, the ITA will issue a transcript to the employee once they finish the technical training and update it each time the employee completes a training level.

Graduating from a Program

To graduate from a program an employee must receive at least one of the following:

  • Certificate of Qualification
  • Certificate of Qualification with an Inter-provincial Red Seal Endorsement
  • Certificate of Apprenticeship

The employee must have received a certificate from the program that they are claiming the tax credit for. Employees can claim only one credit for the program even if they received more than one certificate or certificate and endorsement for graduating from that program.

An employer is not eligible to claim the training tax credit (certification tax credit) when an employee challenges a program to receive trade certification.

Completion Tax Credit Amounts

The completion credit is based on the salary and wages you pay to an apprentice in the 12 months prior to the apprentice completing a level. Levels completed and wages paid before January 1, 2007 don’t qualify for the tax credit.

Red Seal & Non-Red Seal Programs
Completion Tax Credit Level 3 15% of eligible salary and wages up to $2,500
Completion Tax Credit Level 4 15% of eligible salary and wages up to $3,000

Eligible Period

The eligible period is the period that ends at any time in a month that includes the employee’s completion date, doesn’t exceed 12 months and begins on or after January 1, 2007 to December 31, 2017.

Enhanced Tax Credit

An enhanced tax credit is available to employers of First Nations individuals and persons with disabilities if your employee:

Eligible First Nations individuals are persons registered as Indians under the Indian Act (Canada).

The term persons with disabilities refers to individuals who are eligible for the disability amount credit on their income tax return.

See how the enhanced tax credit applies in example 4.

Enhanced Tax Credit Amounts

Credits Enhanced Tax Credit Total Maximum
Tax Credit
Basic Tax Credit 50% of basic tax credit up to $2000 Up to $6000
Completion Tax Credit Level 3 50% of completion tax credit for level 3 up to $1250 Up to $3750
Completion Tax Credit Level 4 50% of completion tax credit for level 4 up to $1500 Up to $4500
Federal Apprenticeship Job Creation Tax Credit 5.5% of eligible salary and wages paid up to $1000 Up to $1000

Claiming the Credit

You can claim more than one credit in a year for an employee, provided the employee meets the requirements for each level in the year. The training tax credit is refundable, but must first be applied against total income tax payable.

Corporations can claim these credits by completing Schedule 428, British Columbia Training Tax Credit and submitting it with their T2 Corporation Income Tax Return

Individual employers can claim these credits by completing British Columbia Training Tax Credit (Employers) form (T1014-1) and submitting it with their T1 Individual Income Tax Return.

You must claim the basic tax credit and enhanced basic tax credit no later than 36 months after the end of the tax year for which the eligible salaries and wages are paid.

You must claim the completion tax credit and the enhanced completion tax credit no later than 36 months after the end of the tax year in which the employee completed the requirements for a tax credit level.

Required Documentation

If you’re claiming a basic tax credit or a completion tax credit, you may be required to provide:

  • A copy of your employee’s transcript from the ITA
  • A copy of the certificate your employee received if they are required to have graduated the program to be eligible for the tax credit

If you’re claiming an enhanced tax credit as a First Nations individual, you may be required to provide a copy of your Certificate of Indian Status card.

If you’re claiming an enhanced tax credit as a person with disabilities, you may be required to provide proof of entitlement.

Examples

See how the three types of training tax credits apply.

Example 1

Your employee, Wilson, registers in the Drywall Finisher program (a non-Red Seal program) with the Industry Training Authority on April 21, 2012. Wilson graduates (receives his Certificate of Qualification) in July 2015. You have a March 31 year end.

You can claim the basic tax credit since the Drywall Finisher program is a non-Red Seal program. The basic tax credit can be claimed for the first 24 months starting on the date Wilson registered with the Industry Training Authority.

You can claim the following basic and completion tax credits:

In your fiscal year: You can claim:
March 31, 2013
  • Basic tax credit for eligible salary and wages paid from April 21, 2012 to March 31, 2013
March 31, 2014
  • Basic tax credit for eligible salary and wages paid from April 1, 2013 to March 31, 2014
March 31, 2015
  • Basic tax credit for eligible salary and wages paid from April 1, 2014 to April 20, 2014 (the end of the 24 month period)
March 31, 2016
  • Level 3 completion tax credit for eligible salary and wages paid from August 2014 to July 2015

Example 2

Your employee, Pavan, starts an Aircraft Maintenance Technician program (a non-Red Seal program) in February 2011, but doesn’t register with Industry Training Authority until October 15, 2013. Pavan completes 5,400 work-based hours on November 30, 2013, and graduates (obtains her Certificate of Qualification) on January 31, 2015. Your year end is December 31.

You can claim the basic tax credit since the Aircraft Maintenance Technician program is a non-Red Seal program. The basic tax credit can be claimed for the first 24 months starting on the date Pavan registered with the Industry Training Authority. You can’t claim the tax credit before October 15, 2013 since Pavan wasn’t registered with the Industry Training Authority until then.

You can claim the following basic and completion tax credits:

In your fiscal year: You can claim:
December 31, 2013
  • Basic tax credit for eligible salary and wages paid from October 15, 2013 to December 31, 2013
  • Level 3 completion tax credit for eligible salary and wages paid between October 15, 2013 and November 30, 2013
December 31, 2014
  • Basic tax credit for eligible salary and wages paid from January 1, 2014 to December 31, 2014
December 31, 2015
  • Basic tax credit for eligible salary and wages paid from January 1, 2015 to January 31, 2015 (the date of Pavan's graduation)
  • Level 4 completion tax credit for eligible salary and wages paid between February 2014 to January 2015

For level 3 completion tax credit, salary and wages paid before October 15, 2013 aren’t eligible since Pavan wasn’t yet registered with the Industry Training Authority.

For level 4 completion tax credit, salary and wages for this period can be counted towards both the basic tax credit and the level 4 completion tax credit.

Example 3

Your employee, Mary, registers in the Plumber program (a Red Seal program) with the Industry Training Authority on June 16, 2011. Mary completes technical training level 3 in March 2014 and graduates (receives her Certificate of Qualification) in August 2015. You have a September 30 year end.

You can’t claim the basic tax credit since the Plumber program is a Red Seal Program. However, you may be able to claim the federal Apprenticeship Job Creation Tax Credit for the first 24 months of the program.

You can claim the following completion tax credit:

In your fiscal year: You can claim:
September 30, 2014
  • Level 3 completion tax credit for eligible salary and wages paid from April 2013 to March 2014
September 30, 2015
  • Level 4 completion tax credit for eligible salary and wages paid from September 2014 to August 2015

There is no level 3 tax credit for the September 2013 fiscal year because the level 3 completion requirements weren’t met until the September 2014 fiscal year.

There is no level 4 tax credit for the September 2014 fiscal year because the level 4 completion requirements weren’t met until the September 2015 fiscal year.

Example 4

Your employee, Roger, is a status Indian under the Indian Act and is enrolled in the Automotive Service Technician program (a Red Seal program). Roger registers as an apprentice with the Industry Training Authority on January 9, 2011, completes Automotive Service Technician level 3 on November 15, 2013, and receives his Certificate of Qualification on January 28, 2015. Your year end is September 30.

You can’t claim the basic tax credit since the Automotive Service Technician program is a Red Seal program. However, you may be able to claim the federal Apprenticeship Job Creation Tax Credit for the first 24 months of the program.

You can claim the following enhanced and completion tax credits:

In your fiscal year: You can claim:
September 30, 2011
  • Enhanced tax credit for eligible salary and wages paid from January 9, 2011 to September 30, 2011
  • Federal apprenticeship job creation tax credit
September 30, 2012
  • Enhanced tax credit for eligible salary and wages paid from October 1, 2011 to September 30, 2012
  • Federal apprenticeship job creation tax credit
September 30, 2013
  • Enhanced tax credit for eligible salary and wages paid from October 1, 2012 to January 8, 2013 (the end of the 24 month period)
  • Federal apprenticeship job creation tax credit
September 30, 2014
  • Level 3 completion tax credit
  • Enhanced tax credit for eligible salary and wages paid from December 2012 to November 2013
September 30, 2015
  • Level 4 completion tax credit
  • Enhanced tax credit for eligible salary and wages paid from February 2014 to January 2015

 

Shipbuilding and Ship Repair Credit

A training tax credit is available for eligible employers that employ apprentices in the B.C. shipbuilding and ship repair industry.

Useful Contacts

Contact us with your general questions about program eligibility:
 
 
Contact Canada Revenue Agency with questions about tax credit claims:
 
  • 1-800-959-8281 (toll free within Canada)

Frequently Asked Questions

Get answers to your questions about the training tax credit for employers.

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