The Apprenticeship Training Tax Credit (ATTC) has been around and available to small businesses and start-ups in Ontario for a while. However, at the time of the 2015 Ontario Budget the ATTC underwent changes to its reimbursement structure. Though some of the percentages of reimbursement to businesses with apprentices have changed, the ATTC remains a critical financial support and one a small business owner should know about.
Who can use this tax credit?
There are several categories of individuals and companies that are eligible to claim this tax credit. A corporation permanently established in Ontario, and sole proprietors filing Ontario personal income tax returns, are eligible. If your company used the services of an employment agency, your incorporated or unincorporated business is considered to be participating in the apprenticeship program with the apprentice, not the employment agency. As such, you are eligible for the ATTC. Finally, members of a partnership may share the ATTC for each qualifying apprenticeship. Limited partners are not entitled to this credit. However, the general partners of a limited partnership are entitled to share the credit.
How much money in on the table?
You may be thinking “I have an apprentice working for me, how much money would my business be eligible for?” That depends on when your apprentice started their training. For apprenticeship programs that began on or after April 24, 2015, your company may be reimbursed 25%-30% of training expenses, depending on the size of your business, up to a maximum annual amount of $5,000 per apprentice. For apprenticeships that started between March 26, 2009 and April 24, 2015, companies may be reimbursed for 35%-45% of their training expenses, up to an annual amount of $10,000 per apprentice. If you have two apprentices that began working for you in June of 2015, you could qualify for a tax credit of up to $10,000. If you have an apprentice that began working for you in January of 2014, you may be eligible for a $20,000 tax credit! You can see where this is adding up to a big financial boost for your business!
What I liked most
The Apprenticeship Training Tax Credit creates a win-win situation; win: apprentices get hired and receive training relevant to their industry, win: companies get a break for hiring and training apprentices and may strike gold and discover a great new employee. This helps to get the tough circumstances of the high youth unemployment rate under control and molds the skills of new workers for success in their new careers. Thus, the ATTC helps reduce financial hardship put upon businesses that take the risk of training an apprentice only for them to leave when the apprenticeship is finished, using those valuable skills they leaned somewhere else. This is a great time for small businesses to consider hiring apprentices.
“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” ― Warren Buffett
Remember the Apprenticeship Training Tax Credit so you don’t needlessly lose out on income for yourself and your business.
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