Open
APCHQ — Apprenticeship job creation tax credit
Last Update: March 3, 2026
Canada
Non-refundable tax credit for employers hiring eligible apprentices
Tax Credits
Overview
The Apprenticeship Job Creation Tax Credit (AJCTC) is a non-refundable investment tax credit worth 10% of eligible salaries and wages, up to a maximum of $2,000 per year per eligible apprentice, to help employers create apprenticeship jobs. It supports employment of eligible apprentices in prescribed (Red Seal) trades during the first two years of a registered apprenticeship contract after May 1, 2006.
At a glance
Funding available
Financing goals
- Develop employee skills
Eligible Funding
- Maximum amount : 2,000 $
- Up to 10% of project cost
Timeline
- Open continuously
Eligible candidates
Eligible Industries
- Construction
- Manufacturing
Location
- Canada
Legal structures
- For-profit business
- Sole proprietorship
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- Canadians
Activities funded
- Hiring and employing eligible apprentices in a prescribed (Red Seal) trade during the first two years of a registered apprenticeship contract.
Documents Needed
- Completed Form T2038(IND), Investment Tax Credit (Individuals)
- Individual income tax return (T1), including line 41200 (Investment tax credit)
Eligibility
- The business must be an employer that hires an eligible apprentice and pays eligible salaries or wages for employment after May 1, 2006.
- The hired apprentice must work in a prescribed trade (including trades listed as Red Seal Trades).
- The apprentice must be in the first two years of their apprenticeship contract.
- The apprenticeship contract must be registered with a federal, provincial, or territorial government under a recognized apprenticeship program designed to certify or license individuals in the trade.
Who is eligible?
- Employers hiring eligible apprentices in prescribed trades (including Red Seal trades)
Eligible expenses
- Eligible salaries and wages payable to eligible apprentices (for employment after May 1, 2006).
How to apply
1
Confirm employer eligibility
- Confirm you are an employer hiring an eligible apprentice
- Ensure the employment is after May 1, 2006
2
Verify apprentice eligibility
- Verify the apprentice works in a prescribed trade (Red Seal trade)
- Confirm the apprentice is in the first two years of their apprenticeship contract
- Ensure the apprenticeship contract is registered with a federal, provincial, or territorial government
3
Calculate the tax credit
- Calculate 10% of eligible salaries and wages payable to the eligible apprentice
- Apply the annual maximum of $2,000 per eligible apprentice
- If related employers share the apprentice, apply special allocation rules so only one employer uses the $2,000 limit
4
Prepare forms and documentation
- Gather the required tax forms and guides
- Use Form T2038(IND) for individuals, or Form T2SCH31 for corporations
- Refer to the relevant income tax package or guide (e.g., T4012)
5
Claim the credit on return
- Claim the AJCTC on your income tax return as an investment tax credit
- For individuals, report it on line 41200 and file Form T2038(IND)
6
Submit return and manage credits
- File your income tax return with the investment tax credit claim
- If applicable, carry back unused credit 3 years or carry forward 20 years
Additional information
- The AJCTC is a non-refundable investment tax credit (ITC) equal to 10% of eligible salaries and wages paid to eligible apprentices for employment after May 1, 2006.
- The maximum credit is $2,000 per year for each eligible apprentice.
- Unused credit can be carried back 3 years and carried forward 20 years.
- If two or more related employers employ the same apprentice, special rules apply so the $2,000 annual limit is allocated to only one employer.
