Co-operative Education Tax Credit
The Co-operative Education Tax Credit (CETC) is a refundable tax credit available to employers operating unincorporated businesses who hire students enrolled in a recognized Ontario university or college co-operative education program.
Certain qualifying leading-edge technology apprenticeship work placements previously included with this credit, will now be claimed under the new Apprenticeship Training Tax Credit instead.
Canada Revenue Agency (CRA) administers the program on behalf of Ontario through the federal income tax system.
The Benefit
An eligible employer may claim a refundable tax credit for each qualifying work placement ending in the tax year equal to the lesser of: 10% to 15% of eligible expenditures made for the work placement and $1,000. The formula required to calculate this tax credit plus a definition of eligible expenditures can be found in the Interpretation Bulletin Co-operative Education Tax Credit in Respect of Ontario Students.
If a qualifying work placement ended in the tax year, the eligible employer may claim this credit to a maximum of $1,000 for each four months of employment, with a minimum employment of 10 weeks. The total tax credit would equal the sum of the tax credits for each qualifying work placement.
Eligibility
Eligible employers must:
- have a permanent establishment located in Ontario, and
- be subject to Ontario income tax, and
- incur eligible expenditures associated with hiring co-op students enrolled in an Ontario university or college.
Eligible employers must hold a certified document from an eligible educational institution confirming that the employer has provided a placement to a student in respect of a qualifying co-op work placement.
Although members of a partnership may share the CETC, limited partners are not entitled to this credit.
The tax credit can be claimed on the return of a person who died in the tax year.
How to Apply
Claim your tax credit on form ON479, Ontario Credits included in your federal income tax return.
Eligible corporations may claim this tax credit by completing CT23 Schedule 113 and entering the amount on Line 192 of the tax return.
