If you are working in the construction industry as a carpenter, electrician, plumber, mechanic or other type of trade, here’s what you need to know about eligible tax deductions, credits and grant programs.
Tax Deductions
Are you a licensed, journey or apprenticed trades person who is working as an employee or independent contractor?
You can deduct up to $500 for tools purchased for use on the job as part of your employment conditions; includes electronic equipment used for measuring, locating and calculating.
You will need to have a list of tools along with receipts.
Your employer will need to complete the Employee Expenses form.
You can also deduct all or a portion of your cell, home, auto, computer and internet.
Apprenticeship Grants & Tax Credits
Do you qualify as an apprentice in the trades?
If you are working in an apprenticeship in the trades for the first two years of continuous employment or contractor, you can qualify for federal grants and provincial government tax credit. These start at $1000 and go up from there.
The Apprenticeship Incentive Grant (AIG) is a $1000 taxable cash grant in the 1st year and up to $2000 in the 2nd year.
*To be eligible, you must be:
- A Canada Citizen as a Permanent Resident or Protected Person
- Not in High School
- Registered in a provincially authorized Red Seal Trade
You will also need AIG documents and proof that you have done the Red Seal Trade program by June 20 after the working the required # of hours.
For more information and to find out if you are eligible: AIG Grants
Are you a qualified Journeyman?
As a Journeyman you have passed the exam and proof of your certification; you can qualify for the Apprenticeship Completion Grant, and Tax Credit (ACG) is $2000 federal grant and provincial tax credit $2000 to $2500.
Depending on the trade, you can claim these grants for some trades in the 3rd and 4th years.
You will also need ACG documents and proof that you have completed the Red Seal Trade program by June 20 after the completion of your hours.
Do you employ apprentices?
The Apprenticeship Job Creation Tax Credit is for employers who are paying wages or salaries to an apprentice.
As an employer, you can qualify to claim a federal credit to up to $2000 per year for each eligible apprentice.
For further information, contact Ina for a free consultation.