Co-operative Education Tax Credit ON Canada

Co-operative Education Tax Credit

ON, Canada
Ontario co-op student tax credit
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  • grant_single|openingDateNovember 14, 2019
  • grant_single|grantStatusClosed
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Tax Credits
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  • Ontario Ministry of Finance
  • Government of Ontario
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Access a refundable tax credit of 30% to a maximum of $3,000 per placement to hire co-op students.

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This tax credit is specific to businesses operating within Ontario, Canada. Eligible companies must have permanent establishments subjected to Ontario corporate or personal income tax.
  • Businesses with permanent establishments in Ontario, Canada.
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$3,000

Engaging a student to assist with community outreach program development for six months

$3,000

Hiring a co-op student to support IT helpdesk operations for two months

$3,000

Hiring a co-op student to support digital marketing efforts for four months

$3,000

Bringing on a co-op student to optimize operational processes for three months

$3,000

Engaging a co-op student for conducting market research for a new product line over five months

$3,000

Bringing a co-op student on board to develop a new mobile application for six months

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Eligibility for the Co-operative Education Tax Credit requires businesses to meet specific criteria related to their operations and the employment conditions they provide.
  • The employer must be a corporation or unincorporated business with a permanent establishment in Ontario.
  • The employer must be subject to Ontario corporate income tax or Ontario personal income tax.
  • Salaries and wages, including taxable benefits paid to the student for the work placement, must be attributable to an Ontario permanent establishment.
  • If government assistance is received, it will reduce the amount of eligible expenditure for the tax credit claim.
  • The employer must supervise and evaluate the student's job performance during the work placement.

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Ontario businesses that hire students enrolled in post-secondary co-operative education programs at Ontario colleges or universities.

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This grant provides tax credits to Ontario businesses hiring students enrolled in qualifying co-operative education programs. The eligible activities concentrate on creating meaningful work placements that align with academic objectives and support experiential learning.
  • Hiring students for work placements developed or approved by eligible educational institutions.
  • Engaging students in productive work during their placement rather than mere observation.
  • Offering work placements ranging from 10 weeks to 16 months, depending on the educational program type.
  • Paying students for their work during the placement period.
  • Supervising and evaluating student's job performance throughout the work placement.
  • Ensuring educational institutions monitor the student's progress in the work placement.

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Eligible expenses for this grant include specific costs related to hiring students for co-operative work placements in Ontario.
  • Salaries and wages including taxable benefits paid or payable to the student for the work placement.
  • Fees paid or payable to an employment agency for the work placement for services of a student carried out primarily at an Ontario place of business.
  • A repayment of government assistance received for a work placement, to the extent it affected a claim in a previous taxation year.

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Here are the steps to apply for the Co-operative Education Tax Credit:
  • Step 1: Determine Eligibility
    • Verify that your business qualifies as an eligible employer with a permanent establishment in Ontario.
    • Ensure the work placement qualifies under the co-operative education program criteria.
  • Step 2: Certification from Educational Institution
    • Contact the eligible educational institution to obtain a certification letter.
    • Ensure the letter certifies the student’s enrolment and the work placement details.
  • Step 3: Calculate the Tax Credit
    • Determine the total eligible expenditures for the student’s work placement.
    • Calculate the tax credit based on your total payroll and eligible expenditures.
  • Step 4: Complete the Necessary Tax Form
    • For corporations, fill out Schedule 550 to file with the T2 Corporation Income Tax Return.
    • For unincorporated businesses, complete Form ON479 with the Personal Income Tax Return.
  • Step 5: Submit the Application
    • Include the completed forms with your relevant tax returns.
    • Make sure the return is filed by the tax year in which the work placement ends.
  • Step 6: Retain Supporting Documentation
    • Keep a copy of the certification letter for at least 7 years.
    • Ensure all supporting documents are accessible in case of an audit.
  • Step 7: Amendments and Inquiries
    • If needed, request amendments to previous returns through the appropriate tax center for incorporated businesses or by following federal instructions for unincorporated businesses.
    • Contact the Canada Revenue Agency for any questions regarding the credit.

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Here are additional relevant details for this grant:
  • Work placements for students in co-operative education programs must be certified by the educational institution, ensuring they meet the program requirements and duration criteria.
  • The credit amount varies based on the employer's total payroll from the previous year, with maximum credit limits applicable per work placement.
  • Employers may need to amend previous tax returns if changes to the credit claim are necessary and must do so within specific time frames depending on corporation type.
  • The entire credit amount must be reported as income in the tax year it is received, impacting the business's taxable income.
  • Employers should retain supporting documentation, such as a letter of certification from the student's educational institution, for at least seven years for possible audits.

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Co-operative Education Tax Credit

Apply to this program