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Apprenticeship Job Creation Tax Credit (AJCTC) - Canada

Apprenticeship Job Creation Tax Credit (AJCTC)

Last Update: June 26, 2025
Canada
Tax credit for hiring apprentices

Apprenticeship Job Creation Tax Credit (AJCTC) at a glance

Eligible Funding
  • Max. $2,000
  • Up to 10% of project cost
Timeline
  • Open Date : November 14, 2019
Financing Type
Tax Credits
Eligible Industries
  • Construction
  • Manufacturing
  • Transportation and warehousing
Grant Providers
  • Canada Revenue Agency (CRA)
  • Government of Canada
Status
Open

Overview of the Apprenticeship Job Creation Tax Credit (AJCTC) program

Get a non-refundable tax credit equal to 10% of the salaries and wages paid to your apprentices from a Red Seal Trade, up to a maximum of $2,000/year for each apprentice.

Financing terms and conditions

  • Non-refundable tax credit equal to 10% of eligible salaries and wages paid to each eligible apprentice.
  • Maximum claimable amount of $2,000 per year for each eligible apprentice.
  • Unused credits can be carried back 3 years and carried forward 20 years.
  • If multiple related employers employ the same apprentice, the $2,000 annual limit applies collectively and must be allocated between them.

Eligible projects & activities

  • Hiring and employing eligible apprentices in prescribed trades as part of a registered apprenticeship program.
Examples of admissible projects:

$ 2,000

Launching a Red Seal electrical apprenticeship program

$ 2,000

Implementing a new welding program to train Red Seal apprentices

$ 2,000

Setting up an HVAC apprenticeship program for Red Seal certification

$ 2,000

Developing an automotive service technician apprenticeship program for Red Seal certification

$ 2,000

Creating a carpentry apprenticeship program for Red Seal certification

$ 2,000

Establishing a culinary apprenticeship program for Red Seal chefs

Eligibility criteria of the Apprenticeship Job Creation Tax Credit (AJCTC) program

  • The employer must hire an eligible apprentice working in a prescribed trade.
  • 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 an apprenticeship program that certifies or licenses individuals in the trade.

Who is eligible?

  • Employers who hire apprentices working in prescribed trades
  • Companies employing individuals in trades listed as Red Seal Trades

Eligible expenses

  • Salaries and wages payable to eligible apprentices employed in a prescribed trade during the first two years of their registered apprenticeship contract.

Eligible geographic areas

  • Employers across Canada, including all provinces and territories, provided the apprenticeship contract is registered with a federal, provincial, or territorial government under an eligible program.

How to apply to the Apprenticeship Job Creation Tax Credit (AJCTC) program

1
Verify Apprentice Eligibility
  • Ensure the apprentice is working in a prescribed trade listed as a Red Seal Trade.
  • Confirm the apprenticeship is in the first two years of their contract.
  • Make sure the apprenticeship contract is registered with the federal, provincial, or territorial government.
2
Calculate Eligible Salaries and Wages
  • Determine the total eligible salaries and wages payable to the eligible apprentice.
  • Calculate 10% of these salaries and wages to find the eligible tax credit.
  • Ensure the credit does not exceed $2,000 per apprentice per year.
3
Prepare Tax Documents for Credits
  • Gather necessary documentation including salary records and the apprenticeship contract.
  • Complete the required Form T2038(IND) for individuals or T2SCH31 for corporations.
  • Ensure accuracy and completion before filing.
4
Submit on Income Tax Return
  • Claim the AJCTC on your individual or corporate income tax return.
  • Input the calculated credit on line 41200 of your tax return.
  • Review the application for accuracy and completeness before submission.
5
Await Confirmation and Processing
  • Submit your tax return through the appropriate federal channels, either electronically or by mail.
  • Keep a copy of the submitted tax return and related documents for your records.
  • Monitor communications for confirmation of processing and credit application.

Additional information

  • Any unused portion of the tax credit can be carried back three years or carried forward twenty years.
  • If more than one related employer employs the same apprentice, special allocation rules ensure the $2,000 maximum is shared appropriately.
  • The AJCTC can be claimed on individual or corporate tax returns using the appropriate forms (T2038(IND) for individuals and T2SCH31 for corporations).
  • A list of prescribed trades eligible for the credit is available through the Red Seal Program.

Documents and links

Apprenticeship Job Creation Tax Credit (AJCTC)

Apply to this program

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