The information below is based on legislative proposals and may be subject to change.
Apprenticeship Job Creation Tax Credit
1. What is the Apprenticeship Job Creation Tax Credit (AJCTC)?
The AJCTC is a non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices in respect of employment after May 1, 2006. The maximum credit is $2,000 per year for each eligible apprentice.
2. Who qualifies?
Any business that hires an “eligible apprentice”.
3. Who is an “eligible apprentice”?
An “eligible apprentice” is someone who is working in a prescribed trade in the first two years of their apprenticeship contract. This contract must be registered with a federal, provincial or territorial government under an apprenticeship program designed to certify or license individuals in the trade.
4. What is a prescribed trade?
A prescribed trade includes the 47 trades currently listed as Red Seal Trades (SEE BELOW). The Minister of Finance may, in consultation with the Minister of Human Resources and Social Development, prescribe other trades.
5. How do I claim the AJCTC?
Employers will be able to claim the credit on their income tax returns, using either Form T2038(IND), Investment Tax Credit (Individuals) or Form T2SCH31, Investment Tax Credit – Corporations.
6. What if I don’t have enough taxes payable to deduct the AJCTC in full?
Any unused credit may be carried back 3 years and carried forward 20 years.
7. What happens when two or more related employers employ the same apprentice?
Special rules apply to ensure that the $2,000 limit is allocated to only one employer.
8. When does this tax measure take effect?
This tax measure applies to eligible salaries and wages payable to an eligible apprentice in respect of employment after May 1, 2006.
9. Where can I get more information about the AJCTC?
Additional information will be available in the 2006 versions of the General Income Tax and Benefit Guide and Guide T4012, T2 Corporation – Income Tax Guide.
List of 47 Red Seal Trades (Prescribed Trades in Q4 above)
1. Agricultural Equipment Technician
2. Appliance Service Technician
3. Automotive Painter
4. Automotive Service Technician
10. Concrete Finisher
11. Construction Electrician
13. Electric Motor System Technician
14. Electronics Technician (Consumer Products)
15. Floorcovering Installer
18. Heavy Duty Equipment Mechanic
19. Industrial Electrician
20. Industrial Instrument Mechanic
21. Industrial Mechanic (Millwright)
22. Insulator (Heat and Frost)
23. Ironworker (Generalist)
24. Ironworker (Reinforcing)
25. Ironworker (Structural/Ornamental)
26. Lather (Interior Systems Mechanic)
28. Metal Fabricator (Fitter)
29. Mobile Crane Operator
30. Motor Vehicle Body Repairer (Metal and Paint)
31. Motorcycle Mechanic
32. Oil Burner Mechanic
33. Painter and Decorator
35. Plumber Analysis
36. Powerline Technician
37. Recreation Vehicle Service Technician
38. Refrigeration and Air Conditioning Mechanic
40. Sheet Metal Worker
41. Sprinkler System Installer
44. Tool and Die Maker
45. Transport Trailer Technician
46. Truck and Transport Mechanic
SOURCE: Red Seal Trades