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Apprenticeship Job Creation Tax Credit

Open, apply anytimeTax creditChecked

If you employ an apprentice in a Red Seal trade in the first two years of a registered apprenticeship, you can claim a tax credit of 10% of their wages, up to $2,000 per apprentice per year, on your tax return. It is a tax credit, not a grant. You can apply anytime.

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At a glance

Maximum supportUp to $2,000 per year for each eligible apprentice (10% of eligible salaries and wages).
Issued byGovernment of Canada, Canada Revenue Agency
Administered byCanada Revenue Agency (CRA)
RegionCanada

Subject to program rules, available funding, and approval. Confirm current details with the official program administrator.

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Is this for you?

  • You employ an apprentice in a Red Seal trade, such as electrician, plumber or carpenter, who is in the first two years of a registered apprenticeship contract.
  • You pay the apprentice eligible salary or wages and file a tax return with the CRA.
  • You owe income tax and want to lower it with a credit for wages you already paid.

Probably not the right fit if

  • Your apprentice is not in a Red Seal trade.
  • You want cash or a grant even if you owe no tax. This credit is non-refundable.
  • Your apprentice is in the third year or later of the contract, or the contract is not registered with a government apprenticeship program.

How much you'd realistically get

Up to $2,000 per eligible apprentice per year, calculated as 10% of eligible wages.

What may be supported

  • Hiring and training apprentices in Red Seal trades such as electrical, plumbing, or carpentry.
  • Expanding workforce capacity by bringing on new apprentices in their first two years of training.

What's excluded or restricted

  • Salaries and wages for apprentices not in the first two years of their contract.
  • Salaries and wages for apprentices not in a prescribed trade (Red Seal Trades).
  • Salaries and wages for apprentices whose contracts are not registered with a federal, provincial, or territorial government.
  • If two or more related employers employ the same apprentice, the $2,000 limit is allocated to only one employer (special rules apply).

How applying works

Effort: moderateKeep payroll records for each eligible apprentice. Complete Form T2038(IND) if you are an individual, or Schedule 31 (T2SCH31) if you are a corporation, with your annual tax return.

  1. 01Check that the apprentice is in a Red Seal trade and in the first two years of a registered apprenticeship contract.
  2. 02Pay the apprentice eligible salary or wages and keep payroll records.
  3. 03Individuals (sole proprietors and partners): complete Form T2038(IND) and claim the credit on line 41200 of your income tax return.
  4. 04Corporations: complete Schedule 31 (T2SCH31) with your T2 corporation income tax return.
  5. 05File your return with the CRA.

Who to ask: Canada Revenue Agency (see the 'Contact us' link on the official CRA page)

Documents commonly required

  • Registered apprenticeship contract.
  • Payroll records showing eligible salaries and wages paid to the apprentice.
  • Proof of registration with a federal, provincial, or territorial apprenticeship program.
  • Completed Form T2038(IND) or T2SCH31.

What to know before you count on it

  • The credit is non-refundable. It can lower your tax to zero, but it does not pay out cash.
  • The cap is $2,000 per apprentice per year. If related employers employ the same apprentice, only one of them gets the $2,000 limit.
  • Only apprentices in a Red Seal trade, in the first two years of a registered contract, qualify.
  • Unused credits can be carried back 3 years or forward 20 years. Keep good records.

What are your odds?

There is no competition. If you and your apprentice meet the rules and you claim correctly, you can claim the credit. The CRA may review your claim.

Frequently asked questions

Is this credit refundable if I don't owe taxes?

No. It is non-refundable. It can lower your tax to zero. Unused credit can be carried back 3 years or forward 20 years.

Which trades qualify?

Prescribed trades, which include the trades currently listed as Red Seal Trades. Check the current list on the Red Seal Program site.

Can I claim this for an apprentice in their third year?

No. The credit is only for apprentices in the first two years of their registered apprenticeship contract.

What if I have multiple related businesses employing the same apprentice?

Special rules apply so that the $2,000 limit goes to only one employer.

More funding by what it pays for

Funding for Training

Grants to help you train staff and adopt new digital tools.

What you can combine it with

Ask your accountant how this credit works with other wage subsidies or tax credits for the same apprentice.

Worth reading before you apply

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Page last updated ; status and deadline checked . Source: official program page.