The Ontario Ministry of Revenue offers a tax credit to businesses that hire post-secondary graduates to internships of 10 weeks or more. The exact amount of the tax credit varies depending on the salaries and wages paid to each co-operative education student work placement, with corporations able to claim 25 percent of eligible expenditures (30% for small businesses) up to $2,000, and as much as $3,000 for small businesses.
How to Qualify for the Ontario Co-operative Education Tax Credit
Qualifying for the Ontario Cooperative Education Tax Credit is simple, you only need to have enrolled in a co-operative education program.
Co-operative Education Tax Credit Details:
The following details pertain to the Ontario Co-operative Education Tax Credit:
- Amount: 25-30% of salary up to $3,000 per semester (for small businesses, otherwise a max. of $2,000)
- Projects: Any post-secondary co-op position.
- Timeline: The tax credit can be utilized every co-op work term semester.
- Eligibility: Able to hire a post-secondary co-op student currently enrolled in a co-operative education post-secondary program and carrying out an official co-op work term within Ontario.
The Co-operative Education Tax Credit is a refundable tax credit and not a small business grant for hiring.
How Do I Claim Eligible Ontario Cooperative Education Tax Credits?
Ontario corporations need only to claim the tax credit on Schedule 550 and file it with their T2 Corporation Income Tax Return (if you are not sure what that is, simply email this article to the person that prepares your taxes).
Supporting Documents Required for Your Ontario Cooperative Education Tax Credits Claim
Remember to save the letter of certification that you receive from the student’s university or college. You should also make sure that the letter includes the following information:
- The name of the student
- The name of the employer
- The name of the educational institution
- The term of the work placement
- The name/discipline of the qualifying co-operative education program.
Hold onto this letter for a minimum of seven years as you may be asked to present it, or else risk forfeiting the credit.
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