Ontario co-operative education tax credit

You can claim the co-operative education tax credit if you are a corporation that provided a qualifying work placement at a permanent establishment in Ontario for a student enrolled in a qualifying post-secondary co-operative education program.

The credit is equal to an eligible percentage (25% to 30%) of the eligible expenditures incurred by the corporation for a qualifying work placement. The maximum credit for each qualifying work placement is $3,000.

Eligibility

To be a qualifying work placement, the work placement must meet all of the following conditions:

  • the student must perform employment duties for a corporation under a qualifying co-operative education program
  • the placement must be developed or approved by an eligible educational institution as a suitable learning situation
  • the terms of the placement must require the student to engage in productive work
  • the placement must be for a period of at least 10 consecutive weeks except, in the case of an internship program, the placement cannot be less than 8 consecutive months and not more than 16 consecutive months
  • the corporation must supervise and evaluate the job performance of the student
  • the institution must monitor the student's performance in the placement
  • the institution must certify the placement as a qualifying work placement
  • the student must be paid for the work performed

Eligible expenditures are:

  • salaries and wages (including taxable benefits) paid or payable to a student in a qualifying work placement
  • fees paid or payable to an employment agency for the provision of services performed by the student in a qualifying work placement

Claiming the credit

File a completed Schedule 550, Ontario Co-operative Education Tax Credit, with your return. Keep a copy of the letter of certification from the eligible educational institution in Ontario to support your claim.

The letter of certification must contain:

  • the name of the student
  • the name of the employer
  • the name of the educational institution
  • the term of the work placement
  • the name/discipline of the qualifying co-operative education program

For more information on the credit, see the schedule and section 88 of the Taxation Act, 2007 (Ontario).

On line 452 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the refundable credit you are claiming.

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