By hiring a Co-op student, employers may be eligible for the Co-operative Education Tax Credit (CETC).
Co-operative Education Tax Credit
When you hire a Co-op student, you may qualify for a tax credit from the Ontario and Canadian Federal Governments.
In Ontario, the Co-operative Education Tax Credit (CETC) allows you to deduct 25-30% of salaries, wages, and benefits to a maximum of $3,000 for each qualifying Co-operative Education work term. CETC is administered by the Ministry of Finance, Corporations Tax Branch, (905) 433-6513, website: http://www.rev.gov.on.ca/english/credit/cetc/
The Canadian federal government provides income tax incentives to Canadian companies that conduct scientific research (SR) and experimental development (ED) in Canada. The program encourages industry, including small business and start-up firms, to develop technologically advanced products and processes in Canada.
If the research and development your company is doing qualifies, the federal tax credit can include the salary for a Co-op student involved in the research process. Canadian-controlled private corporations with less than $200,000 of taxable income can receive a refundable investment tax credit of up to 35% (enriched rate) for qualifying SR & ED expenses. An enriched refundable claim has a limit of $2 million. Other Canadian corporations, proprietorships, partnerships, and trusts can receive an investment tax credit of up to 20% for qualifying SR & ED expenditures.
The program is administered by Canada Customs and Revenue Agency, Toll-free: 1-800-959-5525 (Business Enquiries and Registrations), 1-800-959-2221 (Forms and Publications), Web site: http://www.cra-arc.gc.ca/menu-e.html
Apprenticeship Training Tax Credit