British Columbia training tax credit

Important notice

An extension to the British Columbia training tax credit has been announced. See what's new for British Columbia corporations.

You can claim a refundable tax credit if you are a taxable corporation with a permanent establishment in the province and you paid salary and wages before January 1, 2019, to an employee who was registered in a prescribed program administered through the BC Industry Training Authority.

The province offers a credit to employers based on the wages paid to an apprentice:

  • the basic tax credit for apprentices in the first 24 months of a non-Red Seal program (20%, maximum $4,000)
  • the completion tax credit when an apprentice completes level three or four of either a Red Seal or a non-Red Seal program (15%, maximum $2,500/$3,000)
  • the enhanced tax credit for apprentices who are registered as Indians under the Indian Act or who qualify for the disability amount on their income tax return (all levels of both Red Seal and non-Red Seal programs) (5.5% maximum $1,000, 30% maximum $6,000, or 22.5% maximum $3,750/$4,500)
British Columbia training tax credit
Credit Regular Enhanced
Basic non-Red Seal 20% (max. $4,000)

30% (max. $6,000)

Basic Red Seal nil 5.5% (max. $1,000)
Completion level 3 15% (max. $2,500) 22.5% (max. $3,750)
Completion level 4 15% (max. $3,000) 22.5% (max. $4,500)

 

Note

For level three or four of a Red Seal or non-Red Seal program, level has the same meaning as tax credit level. To complete a tax credit level, see the requirements in the table issued by the Province, Training Tax Credits: Table of Eligible Programs and Completion Requirements for Employers.

You cannot claim the British Columbia training tax credit if you claim the British Columbia shipbuilding and ship repair industry tax credit in the tax year.

You can also claim these credits for former qualified employees for the time they were employed by you during an eligible period, even though they were no longer working for you when they completed a specific level of the apprenticeship program.

These credits extend to partnerships. Corporations who are members of a partnership, other than specified members (such as limited partners), can each claim their share of the partnership's tax credit.

Special rules apply for employers not dealing at arm’s length who want to claim the training tax credit for the same employee. For more details about these rules, see section 125 of the British Columbia Income Tax Act.

For more information about the credit, see Part 9 of the British Columbia Income Tax Act.

You can claim one or more of the following three credits in the year for each qualified employee:

Basic tax credit

The basic tax credit is 20% of the salary and wages (net of designated assistance) that were paid to an employee who was in the first 24 months of a non-Red Seal apprenticeship program in the tax year. The maximum basic tax credit you can claim is $4,000, per employee, per year. This credit is not available to Red Seal programs and cannot be claimed if you are claiming the federal apprenticeship job creation tax credit for the same employee.

Completion tax credit

The completion tax credit is 15% of the salary and wages (net of designated assistance) that were paid to an employee within the 12 month period ending on any day in the month that the employee completed level three or four. The maximum completion tax credit you can claim is $2,500 per employee who has completed level three, and $3,000 per employee who has completed level four. This credit applies to both Red Seal and non-Red Seal programs.

Enhanced tax credit

The enhanced tax credit applies to employees who are registered as Indians under the Indian Act or qualify for the disability amount on their income tax return. Do not claim the basic tax credit or the completion tax credit if you are claiming the enhanced tax credit as these credits are included in the calculation of the enhanced tax credits. An employer claiming the enhanced tax credit for a qualifying employee should only complete Part 3 when filing Schedule 428, British Columbia Training Tax Credit.

The enhanced tax credits are as follows:

  • for the first 24 months of a Red Seal program, 5.5% of the salary and wages (net of designated assistance) that were paid to an employee who was in the first 24 months of a Red Seal apprenticeship program in the tax year. The maximum tax credit you can claim is $1,000 per employee. You can claim this credit in addition to the federal apprenticeship job creation tax credit for the same employee
  • for the first 24 months of a non-Red Seal program, 30% of the salary and wages (net of designated assistance) that were paid to an employee who was in the first 24 months of a non-Red Seal apprenticeship program in the tax year. The maximum tax credit you can claim is $6,000 per employee. This credit is not available to Red Seal programs and cannot be claimed if you are claiming the federal apprenticeship job creation tax credit for the same employee
  • for level three or four of a Red Seal or non-Red Seal program, 22.5% of the salary and wages (net of designated assistance) that were paid to an employee within the 12 month period ending on any day in the month that the employee completed level three or four. The maximum tax credit you can claim is $3,750, per employee who has completed level three and $4,500, per employee who has completed level four. This part of the credit is also called the enhanced completion tax credit

For the completion and enhanced tax credits, the salary and wages can be dually applied to overlapping periods when more than one level is completed during the tax year.

Example

The employer’s tax year runs from January 1 to December 31, 2018.

An employee completes level three on January 31, 2018, and level four on June 30, 2018.

In the tax year, the employer can claim the wages paid from February 1, 2017, to January 31, 2018, for the level three tax credit. In the same tax year, the employer can also claim the wages paid from July 1, 2017, to June 30, 2018, for the level four tax credit. The wages paid from July 1, 2017, to January 31, 2018, are used for both credits.

Claiming the credit

File Schedule 428, British Columbia Training Tax Credit, with your return.

On line 679 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the total amount of the credits you are claiming.

You must claim:

  • the basic tax credit and the enhanced basic tax credit no later than 36 months after the end of the tax year in which the eligible salaries and wages are paid
  • the completion tax credit and the 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
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