Currently many businesses are planning their human resource needs for the upcoming year, which may include hiring apprentices or co-op students. If so, there are tax credits that make this a rewarding option.

The Ontario Apprenticeship Training Tax Credit (ATTC) is available to Ontario businesses and partnerships that hire and train qualifying apprentices.

For each apprentice, the maximum credit is $10,000 per year to a maximum of $40,000 over the first four years (from the date of original registration) of qualifying apprenticeship. The credit is equal to 35% to 45% of the actual salaries and wages paid or payable to an apprentice and it is claimed on the employer’s annual income tax return. To be eligible to claim the credit, apprentices must be in a qualifying skilled trade approved by the Ontario Ministry of Training, Colleges and Universities.

A copy of the training agreement or contract of apprenticeship need not be filed with the claim but should be kept on hand in the event that it is requested to support the employer’s eligibility for the claim. The federal government also offers a similar apprentice credit, the Apprenticeship Job Creation Tax Credit (AJCTC). The federal credit offers a maximum credit of $2,000 per apprentice per year for apprentices in the first two years of their apprenticeship contract. The credit is equal to 10% of the actual salaries and wages paid or payable to an apprentice.

There are numerous ways to find an apprentice, including but not limited to: (1) asking current employees if they are interested in becoming an apprentice, (2) checking with colleges, secondary schools, and trade/industry associations, (3) advertising in newspapers and online, and (4) using the website www.apprenticesearch.com.

The Ontario Co-operative Education Tax Credit (CETC) is available to Ontario businesses and partnerships that hire students enrolled in an Ontario university or college co-operative education program.  For each student, the maximum credit is $3,000 per work placement and is equal to 25% to 30% of the actual salaries and wages paid or payable to a co-op student. The credit is claimed on the employer’s annual income tax return. A work placement must last a minimum of 10 consecutive weeks, except for internships, which must be between 8 and 16 consecutive months in duration. To support the claim, a letter of certification is required that specifies the name of the student, employer, educational institution, and co-operative education program, as well as the term of the work placement. This letter need not be filed with the claim but should be kept on hand should it be requested. The simplest way to find co-op students is to contact the Co-operative Education departments at Ontario universities and colleges to determine the types of co-op programs that exist and the availability of co-op students.

If your business’ human resource needs could be fulfilled by an apprentice or co-op student, the above tax credits make it a worthwhile option. More information can be found at the Canada Revenue Agency’s or Ontario Ministry of Revenue’s websites, or by contacting a Millard’s advisor at (519) 759-3511 .