If you’re self-employed and in the trades, your taxes can benefit from taking on an apprentice.
The Canada Revenue Agency offers a non-refundable tax credit for apprenticeship job creation.
The credit is the federal government’s attempt to encourage employers to create long-term jobs.
If your business is eligible, the tax credit is equal to 10 per cent of your apprentice salaries or wages with a maximum of $2,000 per year for each employed and eligible apprentice.
To be considered eligible, your apprentice must be:
- In the first two years of an apprenticeship program registered with the government
- In a trade listed under the Red Seal Trades
- Working towards a certificate or licence in that trade
There is no limit to the number of apprentices you can hire, and any unused credit can be carried back three years and carried forward 20 years.
How do I claim the credit?
As an employer, you claim the credit on your individual income tax return.
You will use form T-2038 to calculate your individual investment tax credit and then enter the total on Line 412.
This calculation also covers:
- The purchase of certain new buildings, machinery or equipment that were used in certain areas of Canada for such qualifying activities as farming, fishing, logging, manufacturing or processing
- Unclaimed credits earned in the last 10 years
- T-3 slips for trust income allocations and designations
- T-5013 statement of partnership income from 2004 or 2008
- T-5013A statement of partnership income for tax shelters and renounced resource expenses
- T-101 statement of resource expenses
- A partnership financial statement that allocates to you an amount that qualifies for the investment tax credit
- An investment in a mining operation that allocates certain exploration expenditures to you
- Licensed childcare spaces for the children of your employees
Can you help?
We sure can. We specialize in small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.