What is the BC Training Tax Credit?

The BC training tax credit is a refundable income tax credit for companies that employ apprentices from programs that are overseen by the Industry Training Authority. The amount credited is based on the eligible salary and wages the claimant pays the apprentice in question.

Sole proprietorships, partnerships and corporations are all eligible to claim the training tax credit as long as they are subject to BC income tax and have a permanent establishment in the province. To be eligible, the apprentices that are the subjects of the tax credit must be employed in BC in a position that is related to their program of study through the ITA.

Types of training tax credits

Basic tax credit

The basic tax credit is for companies that employ apprentices who are in their first 24 months of a non-Red Seal program. The basic tax credit is 20% of eligible salary and wages up to a maximum of $4,000.

Completion tax credit

The completion tax credit is for companies that employ apprentices who complete level 3 or 4 of a Red Seal or non-Red Seal program. The completion tax credit is 15% of eligible salary and wages up to a maximum of $2,500 for level 3 and $3,000 for level 4.

Enhanced tax credit

The enhanced tax credit is for companies that employ apprentices who are either First Nations individuals registered as Indians under the Indian Act or disabled persons who qualify for the disability amount credit on their income tax return.

The enhanced tax credit for the first 24 months of a Red Seal program is 5.5% of eligible salary and wages up to a maximum of $1,000. The enhanced tax credit for the first 24 months of a non-Red Seal program is 30% of eligible salary and wages up to a maximum of $6,000. The enhanced tax credit for completing level 3 or 4 of a Red Seal or non-Red Seal program is 22.5% of eligible salary and wages up to a maximum of $3,750 for level 3 and $4,500 for level 4.

Source : Government of Canada

How to claim the BC training tax credit

For corporations, fill out Schedule 428, the British Columbia Training Tax Credit form, and submit it along with your T2 Corporation Income Tax Return to claim the credit.

For individual employers, fill out the British Columbia Training Tax Credit (Employers) form, and submit it along with your T1 Individual Income Tax Return to claim the credit.

You may claim more than one training tax credit in a year, provided that all requirements are met. The training tax credit must be claimed no later than 36 months after the end of the relevant tax year.

Make the most of tax credits with help from T2inc.ca

The BC training tax credit is a great incentive for businesses to take on apprentices, particularly candidates with diverse backgrounds. Employers can provide much needed experience and opportunities while benefitting from a reduced tax burden.

Tax credits can make a significant difference to a company’s bottom line, but it can be challenging to sort through the administrative hurdles and make use of them. Fortunately, corporate tax experts are available online to help you streamline the filing process and make the most of the tax credits you are eligible for. Contact T2inc.ca for experienced, professional corporate tax services!