Tax credit aims to boost hiring of apprentices

A refundable apprenticeship training tax credit (ATTC) was recently enacted in Ontario for salaries and wages paid after May 18, 2004 (and before 2011) to apprentices in qualifying skilled trades.

The ATTC, announced by the Ontario government in 2004, has finally received Royal Assent and become law. The credit is intended to encourage the hiring of apprentices in certain skilled trades, many in plant maintenance and engineering fields.

Under the ATTC, corporations are eligible for a 25% refundable tax credit on eligible expenditures incurred with respect to eligible apprentices. For businesses with total payroll costs not exceeding $400,000, the tax credit rate is increased to 30%.

An employer is eligible for a tax credit of up to $5,000 per year per eligible apprentice to a maximum of $15,000 over the first 36 months of the apprenticeship. The maximum annual tax credit of $5,000 would be pro-rated for the number of days the apprentice is employed with that employer during the year.

Eligible apprentices would be in their first 36 months of an apprenticeship-training program in a qualifying skilled trade on or after May 19, 2004, and have commenced employment before January 1, 2008. Eligible expenditures would be salaries and wages paid after May 18, 2004, and before January 1, 2011 to an eligible apprentice.

Qualifying skilled trades include designated construction, industrial and motive power trades, as well as the service trades eligible under the present apprenticeship component of the Co-operative Education Tax Credit (CETC).