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  ->  Employment Expenses  ->  Employee Tools -> Employed apprentice mechanics tools deduction

Tools Deduction for Employed Apprentice Mechanics

Income Tax Act s. 8(1)(r)

Eligible tools which were purchased in order to earn employment income as a eligible apprentice mechanic may be deducted as employment expenses on line 22900 (line 229 prior to 2019) of the federal tax return.  Employment expenses are first entered on Canada Revenue Agency (CRA) Form T777 Statement of Employment Expenses.

The Quebec calculation for the tool deduction for salaried apprentice mechanics differs from the one described below.  However, Quebec has a fillable form, TP-75.2-V, which you can complete, and it will calculate the appropriate deduction amount.

If you are an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction, if any, for which you qualify.  Then, calculate the employed apprentice mechanics tools deduction to determine if this claim can also be made.

What is an eligible tool?

An eligible tool of a taxpayer is a tool, including related equipment, such as a toolbox, that:

bullet is acquired by the taxpayer for the use of the taxpayer in employment as an eligible apprentice mechanic;
bullet has not been used for any purpose before it is acquired by the taxpayer;
bullet is certified, using form T2200, Declaration of Conditions of Employment, by the taxpayer's employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer's employment as a tradesperson; and
bullet is, unless it can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment.

What is an eligible apprentice mechanic?

An eligible apprentice mechanic is

bullet registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, boats, aircraft, or snowmobiles); and
bulletemployed as an apprentice mechanic

How is the apprentice mechanic tools deduction calculated?

Our Employee Tools Deduction Calculator will do the calculation for you.

The maximum deduction for eligible tools = (A-B) + C

where

A = the total cost of eligible tools purchased in the taxation year (same tools used in tradesperson tools deduction calculation), plus, if you became employed as an apprentice mechanic for the first time during the year, the cost of eligible tools purchased during the last 3 months of the preceding year

B = the lesser of:

bullet the total cost of eligible tools tools as determined in A; and
bulletthe greater of:
bullet $500 + the federal Canada employment amount claimed on line 31260 (line 363 prior to 2019) of the tax return (max $1,245 for 2020, $1,257 for 2020); and
bullet 5% of:
bullet your employment income as an eligible apprentice mechanic;
bullet plus the amount you received in the year under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs;
bullet less the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments repaid in the year
bullet less any claim you made for the tradesperson's deduction for tools

C = the amount, if any, of the maximum deduction for eligible tools calculated for the prior year but not claimed in the prior year.

The apprentice mechanic tool deduction cannot exceed the net income for all sources.  This means it cannot create a non-capital loss, and any unused portion can be carried forward.

Example:

bullet Tool purchases in the year = $3,000 (A)
bullet Tradesperson tools deduction claimed = $500
bullet Employment income as eligible apprentice mechanic = $35,000
bullet Canada employment amount claimed = $1,245 (max for 2020)
bullet Apprenticeship Completion Grant received = $1,500
bullet Apprenticeship Incentive Grant overpayment repaid = $550
bullet There is no amount carried forward from the prior year (C=0)

Maximum deduction = (A-B) +C

A = $3,000

B= lesser of $3,000 and

the greater of

bullet $500 + $1,245 = $1,745 and
bullet 5% of ($35,000 + $1,500 - $550 - $500) = $1,772.50

Thus, B = lesser of $3,000 and $1,772.50 = $1,772.50

Maximum deduction = $3,000 - $1,772.50 + 0 = $1,227.50.

If net income before the apprentice tools deduction is less than the maximum deduction, then any unused tools deduction would be carried forward to the next year.

The tool costs will include any GST/HST or provincial sales taxes incurred.  You may be eligible for a refund of the GST/HST included in the costs.  See Employee and Partner GST/HST rebate on the GST/HST page.

When the tools deduction is claimed, keep the information that will allow you to calculate the adjusted cost of each tool.  The adjusted cost is the original cost reduced by any tool deductions claimed.  If you subsequently sell a tool, it is necessary to include any gain from the sale in income.

Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.

Canada Revenue Agency (CRA) Resources

Line 22900 Other Employment Expenses

T4044 Employment Expenses - See Employed Apprentice Mechanics

Form T777 Statement of Employment Expenses

Revised: August 22, 2021

 

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