|is acquired by the taxpayer on or after May 2, 2006 for the use of the taxpayer in employment as a tradesperson;|
|has not been used for any purpose before it is acquired by the taxpayer;|
|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|
|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.|
Our Employee Tools Deduction Calculator will do the federal tools deduction calculation for you.
The deduction is the maximum of $500 and X, where X = A - $1,245 (for 2020), and
A = the lesser of:
|the total cost of eligible tools purchased in the taxation year; and|
the total of:
|Tool purchases in 2020 = $3,000|
|Employment income as a tradesperson = $35,000|
|Apprenticeship Completion Grant received = $1,500|
|Apprenticeship Incentive Grant overpayment repaid = $550|
X = A - $1,245
A = the lesser of
|total cost of eligible tools of $3,000, and|
|$35,000 + $1,500 - $550 = $35,950|
Therefore, X = $3,000 - $1,245 = $1,775, and
the allowable deduction is the lesser of $500 and $1,775, which is $500.
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.
T4044 Employment Expenses - See Employed Tradespersons
Revised: March 26, 2021
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