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 SkilledTradesBC.

Learn about:

• Eligibility requirements
• Salary and wages
• Types and amounts of training tax credits
• How to claim the credit

Eligibility

Both individuals and corporations may be 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 SkilledTradesBC

If you're an active member of a partnership, you can claim your proportionate share of the partnership's tax 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.

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, amounts and table of eligible tax credits

There are three types of training tax credits:  

1. Basic credit for employers of apprentices who are enrolled in the first 24 months of non-Red Seal programs
2. Completion credit for employers of apprentices who completed level 3 or level 4 for both Red Seal and non-Red Seal programs
3. Enhanced credit for employers of individuals registered as Indians under the Indian Act (Canada) or individuals who qualify for the federal disability tax credit

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

• Learn more about the federal apprenticeship job creation tax credit

See our table of eligible programs and completion requirements for information about a specific apprenticeship program.

Basic tax credit

You can claim the basic tax credit if your employee:

• Has signed an apprenticeship agreement under the Skilled Trades BC Act
• Is registered in a non-Red Seal program

The start date of the apprenticeship agreement can be found on the employee's transcript issued by SkilledTradesBC.

Basic tax credit amounts

20% of eligible salary and wages up to $4,000 of the employee who is in the first 24 months of the apprenticeship agreement for non-Red Seal programs.

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 apprenticeship agreement, and must be before January 1, 2028.

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:

• Complete a certain number of work-based hours
• Complete a specific technical training level, or
• Graduate from a program

Different programs have different requirements for each tax credit level. See our table of eligible programs and completion requirements for details regarding a specific program.

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 our table of eligible programs and completion requirements for information about which programs require work-based hours.

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

Specific technical training

For programs where employees are required to complete specific technical training to claim the tax credit, SkilledTradesBC 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 interprovincial Red Seal Endorsement
• Certificate of Apprenticeship

The employee must have received a certificate from the program that you are claiming the tax credit for. You can claim only one credit for the program even if the employee 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. This includes both Red Seal and 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, not exceeding 12 months, that ends at any time in a month that includes the employee's completion date, and must end before January 1, 2028.

See Example 1 and Example 2 above, or Example 3 below for more information.

Enhanced tax credit

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

• Are entitled to a basic or completion tax credit, or
• Received the federal apprenticeship job creation tax credit for the year

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

Eligible persons with disabilities are individuals who qualify for the federal disability tax credit.

Enhanced tax credit amounts

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 SkilledTradesBC
• 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 for your employee who's a First Nations individual, you may be required to provide a copy of their Certificate of Indian Status card.

If you're claiming an enhanced tax credit for your employee who's a person with disabilities, you may be required to provide proof of entitlement.