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Filing Your Return -> Line 45350 Canada Training Credit

Line 45350 Canada Training Credit (CTC)

Income Tax Act s. 122.91

The Canada Training Credit was included in Bill C-97, Budget Implementation Act, 2019, No. 1, which received Royal Assent on June 21, 2019.

Effective January 1, 2019, the Canada Training Amount started accumulating at the rate of $250 per year (not indexed), based on the following criteria:

bulletFor Canadian resident taxpayers
bulletaged 25 to under 65
bulletwho were resident in Canada throughout the year, and
bullethave filed a tax return for that year
bulletWorking income (including maternity and parental benefits) must be at least $10,000 in the preceding year, indexed after 2020.
bulletWith net income NOT exceeding the top threshold of the 3rd tax bracket for the preceding year ($150,473 for 2020, $151,978 for 2021, $155,625 for 2022).
bulletLifetime limit of the training amount is $5,000 (not indexed).
bulletAny unused balance will expire at the end of the year in which the taxpayer turns 65, or when the taxpayer dies.

Canada Training Credit Earnings Limits

Year Lower
Threshold
Upper
Threshold
2019 $10,000 $147,667
2020 10,000 150,473
2021 10,100 151,978
2022 10,342 155,625

The above table means that to accumulate the annual training amount limit of $250 for the 2021 taxation year the following conditions must be met:

bullettaxpayer aged 25 to less than 65 at December 31, 2021
bullettaxpayer was a Canadian resident throughout 2020
bullethave total working income of $10,000 or more in 2020 (checking on this - CRA says $10,100 in one place and $10,100 in another)
bullethave individual net income for 2020 that did not exceed $150,473

Claiming the CTC on the Tax Return

The refundable training credit can be claimed on line 45350 of the tax return by completing Schedule 11, for a year in which the taxpayer incurs eligible tuition fees (including ancillary fees and charges and examination fees), which would be reported on the taxpayer's T2202 tax slip.

The claim is the lesser of

bulletthe training credit accumulated to the end of the previous taxation year,
bullet 50% of the eligible tuition and fees paid, and
bullet$5,000 less training credits claimed in previous years.

Eligible tuition fees will be the same as under the existing rules for the Tuition Tax Credit, except that educational institutions outside of Canada will not be eligible.  Eligible educational institutions include:

bulleta university, college or other educational institution providing courses at a post-secondary school level, or
bulletcertified by the Minister of Employment and Social Development to be an educational institution providing courses designed for university credit, that furnish a person with skills for, or improve a person's skills in, an occupation.

If the amount of the training credit allowable exceeds tax otherwise payable, the balance will be refunded.

Eligible tuition fees for the Tuition Tax Credit will be reduced by the amount of the training tax credit deducted.

The first taxation year in which a Canada Training Credit can be claimed was 2020, based on tuition fees incurred in 2020 and the accumulated training credit for 2019 ($250).

Canada Training Credit (CTC) Example

bulletDuncan has accumulated training amounts for 2019 to 2020, so his CTC limit at the end of 2020, for a 2021 claim, is $500 (2 yrs x $250).
bulletHe has eligible tuition fees in 2021 of $7,000.
bulletHis claim amount for 2021 is $500, being the lesser of:
bullet$7,000 x 50% = $3,500 and
bullethis CTC limit of $500 (previous year balance of CTC)

If Duncan's tax payable for 2021 is zero prior to this credit, he will get a refund of $500, because this is a refundable tax credit.

Tuition amount that can be claimed for 2021 is $7,000 - $500 = $6,500.

Year

CTC Annual
Limit

CTC
Claimed

CTC
Balance

2019 $250 0 $250
2020 250 0 500
2021 250 0 750
2022 250 750 250
2023 250 0 500
2024 250 0 750

Provincial Training Credits

Ontario Refundable Jobs Training Tax Credit

bulletinitially planned for 2021 only (Ontario Taxation Act, 2007, s. 103.0.4)
bulletOntario 2021 Economic Outlook and Fiscal Review proposes to extend by one year to 2022. This extension is included in Bill 43.
bulletan individual is eligible if:
bulletthey are resident in Ontario on Dec 31st of the taxation year, and
bulletthe Canada Training Credit limit of the individual for the year is greater than zero.
bulletthey are aged 26 to 65 years old at the end of the taxation year, and meet the other requirements of the Canada Training Credit.
bulleteligible expenses are based on expenses that may be claimed in respect of the federal tuition tax credit (ITA s. 118.5(1)(a) and (d), but only for costs paid to an educational institution in Canada, and including examination fees to obtain a professional status, and licensing fees to be certified as a tradesperson.
bulletcredit is the lesser of $2,000 and 50% of the eligible expenses.
bulletnot limited by the amount of the taxpayer's Canada Training Credit balance, but the balance must be greater than zero.
bulletwill be claimed on the 2021 tax return.

Ontario Jobs Training Tax Credit Example

Taxation Act, 2007 s. 103.0.4

If Duncan, from the Canada Training Credit example above, is a resident of Ontario, then his Ontario refundable jobs training tax credit for 2021 would be:

bulletthe lesser of $2,000 or 50% of eligible expenses of $2,000
bullet50% of eligible expenses = $3,500

Duncan will have an Ontario refundable tax credit of $2,000.

See Ontario Jobs Training Tax Credit on the Ontario website.

Canada Revenue Agency Resources

Canada Training Credit

Revised: November 28, 2021

 

 

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