Co-operative Education Tax Credit
ON, Canada
Ontario co-op student tax credit
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grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
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Tax Credits
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- grant_single|allIndustries
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- Government of Ontario
- Ontario Ministry of Finance
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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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grant_single|admissibleProjectsExample
$ 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
$ 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
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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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Some types of companies might not be eligible for the Co-operative Education Tax Credit. They could include:
- Limited partners in a partnership
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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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Ontario businesses can apply for this tax credit as it targets employers with permanent establishments within the province. Eligible companies must be participating in co-operative education programs offered by institutions in Ontario.
- Businesses with permanent establishments in Ontario.
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There are evaluation and selection criteria for this grant as follows:
- The employer must be an eligible corporation or unincorporated business with a permanent establishment in Ontario and subject to Ontario corporate income tax.
- The work placement must adhere to specific conditions such as duration, integration with academic studies, and student payment.
- Government assistance received for the work placement may impact the eligibility of expenditures for the tax credit.
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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.
