Ontario Co-operative Education Tax Credit – Ontario Ministry of Finance

ByMaurice

Description:

The Co-operative Education Tax Credit is a refundable tax credit available to employers who hire students enrolled in a co-operative education program at an Ontario university or college. Most work placements are for a minimum employment period of 10 weeks up to a maximum of four months.

Comments on Funding:

Funding is up to 25% for corporations and 30% for small businesses of the eligible expenditures incurred by the corporation for a qualifying work placement. The maximum credit is $3,000 per placement.

For eligible expenditures incurred after March 26, 2009:

  1. Small businesses are entitled to the CETC at 30%.
  2. Taxpayers with payrolls of $600,000 or more are entitled to the CETC at 25%.
  3. Eligible employers may claim a refundable tax credit equal to the lesser of:
  • 25% (30% for small businesses for qualifying work placements) of the eligible expenditures made in respect of that work placement, and
  • $3,000.

For eligible expenditures incurred before March 27, 2009:

  1. A small business whose total payroll in the previous taxation year was $400,000 or less is entitled to the CETC at 15%.
  2. Taxpayers with payrolls of $600,000 or more are entitled to the CETC at 10%.
  3. Eligible employers may claim a refundable tax credit equal to the lesser of:
  • 10% (15% for small businesses) of the eligible expenditures made in respect of the work placement, and
  • $1,000.

Eligibility:

The applicant must:

  • be a corporation or an unincorporated businesses,
  • have permanent establishments in Ontario subject to Ontario corporate income tax or Ontario personal income tax. 
  • hire students enrolled in a post-secondary co-operative education program.

Documentation Needed:

The applicants must:

  • claim the tax credit on Schedule 550 and file it with their T2 Corporation Income Tax Return, if corporations;
  • claim the tax credit on form ON479, Ontario Credits, included in their personal income tax return, if unincorporated businesses;
  • claim their share of the CETC on their own corporate or personal tax returns, if members of a partnership;
  • Keep a copy of the letter of certification from the eligible educational institution in Ontario to support their tax credit claim.

About the author

Maurice

Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business. Click here to learn more about Moe’s background and how he can help your business.

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