Training tax credit for employers
BC, Canada
British Columbia apprentice training tax credit for employers
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|maxCount
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|timelineUnspecified
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Construction
- Manufacturing
- Other services (except public administration)
- Public administration
grant_single|grantors
- Government of British Columbia
- Ministry of Finance (BC)
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grant_card_status|open
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Organizations that employ apprentices enrolled Industry Training Authority programs get 20% to 50% up to $6,000 in enhanced tax credits.
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The training tax credit is available for employers engaging in activities related to employing apprentices in eligible apprenticeship programs through SkilledTradesBC.
- Enrolling apprentices in non-Red Seal programs
- Employing apprentices to complete specific work-based hours
- Supporting apprentices to complete required technical training levels
- Facilitating apprentices’ graduation from eligible programs
- Employing First Nations individuals and persons with disabilities in eligible apprenticeship programs
grant_single|admissibleProjectsExample
$6,000
Ottawa
Construction Apprenticeship for Disabled Individuals in Ottawa
$6,000
Calgary
Program for HVAC Apprentices in Calgary
$6,000
Toronto
Carpentry Apprentice Program in Toronto
$6,000
Vancouver
Training Program for Marine Mechanic Apprentices in Vancouver
$6,000
Halifax
Electrical Apprenticeship Support in Halifax
$6,000
Winnipeg
Plumbing Apprenticeship Program for First Nations in Winnipeg
grant_single_labels|admissibility
Employers in British Columbia subject to B.C. income tax and employing apprentices enrolled in SkilledTradesBC programs are eligible to claim the training tax credit.
- Sole proprietors, partnerships, and corporations are eligible.
- Subject to B.C. income tax for the taxation year that the credit is being claimed.
- Resident in B.C. on the last day of the taxation year or a corporation with a permanent establishment in B.C. at any time in the taxation year.
- Employees must be in a position related to the program they are registered in through SkilledTradesBC.
- Active members of a partnership can claim their proportionate share of the partnership's tax credit.
- Corporations exempt from tax under section 27 of the Income Tax Act or directly/indirectly controlled by an exempt entity are not eligible.
grant_eligibility_criteria|eligible_expenses
The grant outlines eligible expenses primarily based on the gross salary and wages payable to an eligible apprentice. Certain types of remuneration and government assistance are excluded from eligible expenses.
- Gross salary and wages paid to eligible employees
- Excludes profits
- Excludes bonuses
- Excludes employee benefits
- Excludes stock options
- Excludes unpaid amounts as described in section 78(4) of the federal Income Tax Act
- Excludes both government and non-government assistance
grant_eligibility_criteria|zone
The eligible geographic zones for this grant are restricted to the province of British Columbia, Canada. To qualify, you must either be a resident of B.C. or have a corporation that maintained a permanent establishment in B.C. at any time during the taxation year.
- Resident in B.C. on the last day of the taxation year
- Corporation that maintained a permanent establishment in B.C. at any time in the taxation year
grant_single_labels|register
- Step 1: Verify Eligibility
- Make sure that you are a sole proprietor, partnership, or corporation subject to B.C. income tax.
- Ensure your employee is in a position related to their program registered with SkilledTradesBC.
- Step 2: Track Eligible Salary and Wages
- Calculate gross salary and wages paid to your eligible employee, excluding profits, bonuses, employee benefits, stock options, or unpaid amounts.
- Exclude government and non-government assistance from eligible salary and wages.
- Step 3: Claim Basic Tax Credit (If Applicable)
- If your employee is registered in a non-Red Seal apprenticeship program, claim the basic tax credit for the first 24 months of the apprenticeship agreement.
- Step 4: Claim Completion Tax Credit (If Applicable)
- For both Red Seal and non-Red Seal programs, claim the completion tax credit when the employee completes level 3 or level 4 of the program.
- Ensure the completion requirements are met, which may include completing work-based hours, specific technical training, or graduating from a program.
- Step 5: Claim Enhanced Tax Credit (If Applicable)
- If your employee is a First Nations individual or a person with disabilities, claim the enhanced tax credit, provided you are entitled to a basic or completion tax credit or the federal apprenticeship job creation tax credit for the year.
- Step 6: Complete Relevant Tax Forms
- Corporations: Fill out Schedule 428, British Columbia Training Tax Credit, and submit it with your T2 Corporation Income Tax Return.
- Individual Employers: Complete the British Columbia Training Tax Credit (Employers) form (T1014-1) and submit it with your T1 Individual Income Tax Return.
- Step 7: Adhere to Claim Deadlines
- Claim the basic and enhanced basic tax credit no later than 36 months after the end of the tax year for which eligible salaries and wages are paid.
- Claim the completion and enhanced completion tax credit no later than 36 months after the end of the tax year in which the employee completed the requirements for a tax credit level.
- Step 8: Keep Required Documentation
- Maintain a copy of your employee's transcript from SkilledTradesBC and their certificate of qualification if required.
- For enhanced tax credits, retain proof of entitlement such as the Certificate of Indian Status card or proof of disability.
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Employers can claim the training tax credit by submitting the required forms with their tax returns, and various deadlines apply for different types of credits.
- Corporations must complete Schedule 428, British Columbia Training Tax Credit and submit it with their T2 Corporation Income Tax Return.
- Individual employers must complete British Columbia Training Tax Credit (Employers) form (T1014-1) and submit it with their T1 Individual Income Tax Return.
- The basic tax credit and enhanced basic tax credit must be claimed no later than 36 months after the end of the tax year for which the eligible salaries and wages are paid.
- The completion tax credit and the enhanced completion tax credit must be claimed no later than 36 months after the end of the tax year in which the employee completed the requirements for a tax credit level.
- A deadline extension allowed claims required to be made between March 13, 2020, and December 30, 2020, to be extended to six months from the original due date or to December 31, 2020, whichever was earlier.
grant_single_labels|contact
itbtaxquestions@gov.bc.ca
Apply to this program
B.C. Training Tax Credit for Employers
The B.C. Training Tax Credit offers refundable income tax credits for employers who hire apprentices enrolled in programs administered through SkilledTradesBC, with extended eligibility until December 31, 2027.
Understanding B.C. Training Tax Credit for Employers
The British Columbia (B.C.) Training Tax Credit for employers is a robust initiative aimed at bolstering workforce development within the province. This grant provides refundable income tax credits to employers who hire apprentices enrolled in training programs managed by SkilledTradesBC. In this detailed guide, we will delve into the intricacies of this tax credit, eligibility criteria, types of credits, and the claiming process. The goal is to provide a comprehensive understanding to help businesses leverage this opportunity to foster skills development while mitigating tax liabilities.
Eligibility Requirements
To qualify for the B.C. Training Tax Credit, employers must meet specific criteria. Sole proprietors, partnerships, and corporations are all eligible. The essential conditions include: 1. **B.C. Income Tax Liability:** Employers must be subject to B.C. income tax in the year the credit is claimed. This applies to: - Residents of B.C. on the last day of the taxation year. - Corporations with a permanent establishment in B.C. at any point during the taxation year. 2. **Business Operations in B.C.:** Employees must work in a business conducted within B.C. throughout the tax year and their position must be related to their SkilledTradesBC registration program. 3. **Active Partnership Members:** If part of a partnership, the individual must be actively engaged in a similar business to claim their share of the tax credit. However, limited partners are not eligible. Certain corporations are ineligible, such as those exempt from tax under section 27 of the Income Tax Act or those with taxable income exempt under Part 1 of the federal Income Tax Act. Additionally, corporations controlled by tax-exempt entities are also disqualified.
Eligible Programs and Training Levels
The tax credit supports apprenticeships in non-Red Seal and Red Seal programs, with different benefits structured for each. Employers must pay eligible salaries and wages to apprentices enrolled in programs listed by SkilledTradesBC. Even if a program is not listed, contacting the relevant authorities may still yield eligibility.
Salary and Wages
The amount of the training tax credit hinges on the employer's total eligible salary and wages paid to an apprentice during the eligible period. Eligible salary and wages encompass the gross amounts paid, excluding bonuses, employee benefits, stock options, government and non-government assistance, and certain unpaid amounts as described under section 78(4) of the federal Income Tax Act.
Types and Amounts of Training Tax Credits
There are three main types of training tax credits available: 1. **Basic Credit:** - Applies to the first 24 months of non-Red Seal apprenticeship programs. - Employers can claim 20% of the eligible salary and wages up to $4,000. 2. **Completion Credit:** - Applies to the completion of level 3 or level 4 for both Red Seal and non-Red Seal programs. - For Level 3, employers can claim 15% of the eligible salary and wages up to $2,500. - For Level 4, employers can claim 15% of the eligible salary and wages up to $3,000. 3. **Enhanced Credit:** - Targets First Nations individuals and persons with disabilities. - Enhances the basic and completion credits by an additional 50%. - For the basic tax credit, this equates to up to $2,000 more (totaling $6,000). - For Completion level 3, up to $1,250 more (totaling $3,750). - For Completion level 4, up to $1,500 more (totaling $4,500). The federal government also provides a non-refundable Apprenticeship Job Creation Tax Credit applicable to the first 24 months of Red Seal apprenticeship programs.
How to Claim the Credit
Employers can claim multiple types of credits in a single year for an employee, provided the employee meets the requirements for each level. The training tax credit is refundable but must first be applied against the total income tax payable. 1. **Corporations:** - Complete Schedule 428, British Columbia Training Tax Credit. - Submit it with the T2 Corporation Income Tax Return. 2. **Individuals:** - Complete the British Columbia Training Tax Credit (Employers) form (T1014-1). - Submit it with the T1 Individual Income Tax Return. Key deadlines to note: - Basic and enhanced basic tax credits must be claimed within 36 months after the tax year-end. - Completion and enhanced completion tax credits must be claimed within 36 months after the employee completes the requirements for that tax credit level.
Required Documentation
Depending on the type of credit claimed, the following documentation may be required: - A copy of the apprentice's transcript from SkilledTradesBC. - A copy of the certificate awarded upon graduating the program. - Proof of Certificate of Indian Status for First Nations individuals. - Proof of entitlement for persons with disabilities.
Examples of Credit Application
Consider the following examples to understand how these credits apply: **Example 1: Basic and Completion Tax Credits** Wilson, enrolled on April 21, 2019, in the Drywall Finisher program, graduates in July 2022. - Fiscal Year-End March 31, 2020: Basic credit for wages from April 21, 2019, to March 31, 2020. - Fiscal Year-End March 31, 2021: Basic credit for wages from April 1, 2020, to March 31, 2021. - Fiscal Year-End March 31, 2022: Basic credit for wages from April 1, 2021, to April 20, 2021. - Fiscal Year-End March 31, 2023: Completion credit level 3 for wages from August 2021 to July 2022. **Example 2: Delayed Registration** Pavan starts an Aircraft Maintenance Technician program in February 2018 but registers only on October 15, 2020. - Fiscal Year-End December 31, 2020: Basic credit for wages from October 15, 2020, to December 31, 2020. Level 3 completion credit for wages from October 15, 2020, to November 30, 2020. - Fiscal Year-End December 31, 2021: Basic credit for wages throughout 2021. - Fiscal Year-End December 31, 2022: Basic credit for wages through January 2022. Level 4 completion credit for wages from February 2021 to January 2022. **Example 3: Red Seal Program** Mary in the Plumber program registers on June 16, 2018, completes level 3 in March 2021, and graduates in August 2022. - Fiscal Year-End September 30, 2021: Level 3 completion credit for wages from April 2020 to March 2021. - Fiscal Year-End September 30, 2022: Level 4 completion credit for wages from September 2021 to August 2022. **Example 4: Enhanced Tax Credit for First Nations** Roger, a status Indian, in the Automotive Service Technician program registers on January 9, 2018, completes level 3 on November 15, 2020, and graduates on January 28, 2022. - Fiscal Year-End September 30, 2018: Enhanced tax credit for wages from January 9, 2018, to September 30, 2018. Federal credit for eligible wages. - Fiscal Year-End September 30, 2019: Enhanced tax credit for wages through September 2019. Federal credit for eligible wages. - Fiscal Year-End September 30, 2020: Enhanced tax credit for wages through January 8, 2020. Federal credit for eligible wages. - Fiscal Year-End September 30, 2021: Level 3 completion and enhanced tax credit for wages from December 2019 to November 2020. - Fiscal Year-End September 30, 2022: Level 4 completion and enhanced tax credit for wages from February 2021 to January 2022.
Including the Refund in Income
The tax credit refund is deemed government assistance and must be included as taxable income or a cost reduction.
Special Rules for Related Employers
In cases where related employers employ the same apprentice, special rules ensure the credit is split appropriately so that the total credit doesn’t exceed individual entitlement limits.
Administration and Disputes
The Canada Revenue Agency (CRA) administers the tax credit, reviews claims, and issues refunds where applicable. Disagreements with CRA's assessments can be addressed by filing a Notice of Objection within 90 days of the assessment date. By understanding and utilizing the B.C. Training Tax Credit, employers can benefit significantly from reduced tax liabilities while contributing to the growth and development of skilled trades within British Columbia. Take proactive steps to ensure compliance and maximize your eligible claims under this beneficial tax credit program.