Co-operative Education Tax Credit (CETC)

By mmuise
Description:

The Co-operative Education Tax Credit is a refundable tax credit available to employers who hire students enrolled in a co-operative education program at an Ontario university or college. Most work placements are for a minimum employment period of 10 weeks up to a maximum of four months.


Comments on Funding:

Funding is up to 25% for corporations and 30% for small businesses of the eligible expenditures incurred by the corporation for a qualifying work placement.
The maximum credit is $3,000 per placement.
For eligible expenditures incurred after March 26, 2009:
1. Small businesses are entitled to the CETC at 30%.
2. Taxpayers with payrolls of $600,000 or more are entitled to the CETC at 25%.
3. Eligible employers may claim a refundable tax credit equal to the lesser of:
a) 25% (30% for small businesses for qualifying work placements) of the eligible expenditures made in respect of that work placement, and b) $3,000.
For eligible expenditures incurred before March 27, 2009:
1. A small business whose total payroll in the previous taxation year was $400,000 or less is entitled to the CETC at 15%. 2. Taxpayers with payrolls of $600,000 or more are entitled to the CETC at 10%.
3. Eligible employers may claim a refundable tax credit equal to the lesser of:
a) 10% (15% for small businesses) of the eligible expenditures made in respect of the work placement, and
b) $1,000.

Deadline: Rolling deadline
Eligibility:

The applicant must:

  • be a corporation or an unincorporated businesses,
  • have permanent establishments in Ontario subject to Ontario corporate income tax or Ontario personal income tax.
  • hire students enrolled in a post-secondary co-operative education program.
Application Steps:

No specific steps have been identified.

Documentation Needed:

The applicants must:
1. claim the tax credit on Schedule 550 and file it with their T2 Corporation Income Tax Return, if corporations;
2. claim the tax credit on form ON479, Ontario Credits, included in their personal income tax return, if unincorporated businesses;
3. claim their share of the CETC on their own corporate or personal tax returns, if members of a partnership;
4. Keep a copy of the letter of certification from the eligible educational institution in Ontario to support their tax credit claim.

Other Things to Note:

Updated: October 04, 2023

About the author
mmuise