Deduction for tools for an eligible apprentice mechanic

Even though you may have already claimed the tradesperson's deduction for tools, you may also be able to deduct a part of the cost of eligible tools you bought in 2018 to earn employment income as an eligible apprentice mechanic.

Use the following formula to calculate your maximum deduction for the cost of eligible tools you bought in 2018 if you were an eligible apprentice mechanic at any time in 2018:

Maximum deduction for eligible toolsFootnote 1 = (A − B) + C

where

A = the total cost of eligible tools that you bought in 2018Footnote 2

B = the lesser of:

1. the total cost of eligible tools that you bought in 2018 as calculated in A

2. the greater of:

  • $500 + the Canada employment amount claimed on line 363 of Schedule 1 (max. $1,195)
  • 5% of:
    • your employment income as an eligible apprentice mechanic;
    • plus the amount you received in 2018 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs;
    • minus any claim you made for the tradesperson's deduction for tools, and the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2018.

C = the amount, if any, of the maximum deduction for eligible tools that you calculated for 2017 that you did not claim in 2017 (your carry forward amount from 2017, if any).

Note

If you do not want to claim the maximum deduction, you can carry forward the unused amount for use against income earned in a future year. You can deduct the unused amount against any type of income in a future year even if you are no longer employed as an eligible apprentice mechanic at that time.

Example

The Motor Company hired Bill as a second-year eligible apprentice mechanic on November 1, 2017. Based on the tools he bought during 2017, Bill calculated his maximum deduction for eligible tools in 2017 to be $3,500. He only claimed $1,500 of this amount on his 2017 return. In 2018, Bill received $18,000 in income from his job as an eligible apprentice mechanic. In 2018, he received $1,000 under the Apprenticeship Incentive Grant program, and he also received income of $4,000 from other sources.

During September of 2018, Bill bought 2 eligible tools for $4,500. He already calculated and claimed a tradesperson's tool deduction of $500 for 2018. He had also claimed a Canada employment amount of $1,195.

Bill calculated his maximum deduction for eligible tools in 2018 as follows:

Maximum deduction for eligible tools = (A − B) + C

where

A = $4,500

B = the lesser of:

1. $4,500; and

2. the greater of:

  • $1,695 ($500 + $1,195)
  • $925 [5% of ($18,000 + $1,000 - $500)]

C = $2,000

Therefore, Bill 's maximum deduction in 2018 is $4,805 ([$4,500 − $1,695] + $2,000) since it is less than his net income of $22,500 ([$18,000 + $1,000 − $500] + $4,000).

Bill claims his deduction of $4,805 on line 229 of his return.

Completing your tax return

Enter your claim on the Apprentice mechanic tools expenses line (9131) of Form T777, Statement of Employment Expenses.

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