Manitoba co-op education and apprenticeship tax credit

Important notice
Changes have been announced to Manitoba co-op education and apprenticeship tax credit. See What's new for corporations.

The Manitoba co-op education and apprenticeship tax credit includes the following:

• co-op student hiring incentive;
• co-op graduate hiring incentive;
• early level apprentice hiring incentive;
• advanced level apprentices hiring incentive; and
• journeypersons hiring incentive.

Beginning in 2011, the tax credit will be expanded to include the early level apprentice hiring incentive, available to employers who hire high school and post secondary level 1 and 2 apprentices who are not eligible for the federal apprenticeship job creation tax credit.

The Province of Manitoba will issue a "Proof of credit" certificate to the corporation or partnership for each qualifying work placement or qualifying employment.

A corporation that is exempt under section 149 of the Income Tax Act is now eligible to claim this credit. Along with Schedule 384, the exempt corporation will also have to complete Schedule 5, Tax Calculation Supplementary - Corporations and file a T2 Corporation Income Tax Return.

Co-op work placements

You can claim this credit if you are an employer who provides a work placement for a student enrolled in a qualifying post-secondary co-operative education program.

The work placement must end on or before the end of a tax year and before 2012.

The credit for each qualifying work placement is the lesser of:

• $1000; and
• 10% of the wages and salary paid to the employee for work performed mainly in Manitoba, less government assistance.

The credit will be nil if the student under the work placement has had five previous qualifying work placements.

The credit for work placements that end prior to March 7, 2006, is non-refundable. You can claim any unused credit earned before this date to reduce total taxes payable. Any remaining credit that has not expired can be carried forward ten tax years that follow the tax year in which you earned the credit. Unused credits may be carried forward on amalgamation or wind-up.

The credit earned for work placements that end after March 6, 2006, is fully refundable, but must first be applied against total taxes payable. The carry-back and carry-forward provisions do not apply to a credit earned after March 6, 2006.

Co-op graduates hiring incentive

You can claim this credit if you are an employer that has hired co-op graduates in full time employment in Manitoba, and retained them for at least one year. The students must have graduated after March 6, 2006, and before 2012, from a recognized post-secondary co-operative education program in a field related to the employment.

The credit is equal to 5% of the net wages and salaries paid to the graduate in each of the first two full years of employment, to a maximum of $2,500 for each year, where the employment starts within 18 months of graduation.

This credit is fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

Early level apprentice hiring incentive

You can claim this credit if you are an employer who hires high-school and post-secondary level 1 and 2 apprentices in Manitoba after December 31, 2010, and before 2014, and the wages and salary you paid them are not eligible for the federal apprenticeship job creation tax credit.

The new credit is equal 10% of net wages and salaries paid to an apprentice, up to a maximum of $2,000.

Advanced-level apprentice hiring incentive

You can claim this credit if you are an employer that has hired an apprentice who is enrolling at an advanced level (3, 4, or 5) in Manitoba after December 31,2008, and before 2012. The credit can be claimed in the year the level is completed.

The credit is equal to 5% of the wages and salaries paid to the apprentice for work performed in Manitoba, less any government assistance received or receivable. The maximum credit for one apprentice completing one level is $2,500. You can apply for an unlimited number of apprentices.

This credit is fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

Journeypersons hiring incentive

You can claim this credit if you are an employer that has hired recent graduates of apprenticeship programs in full time employment in Manitoba, and retained them for at least one year. The journeyperson must have received their certificate of qualification in Canada after April 9, 2008, in a field related to the employment.

The credit is equal to 5% of the wages and salaries paid to the journeyperson in each of the first two full years of employment, to a maximum of $2,500 for each year, where the employment starts within 18 months of certification.

Employment periods must be continuous and consecutive, but an employment period of twelve-month's duration may be interrupted by a seasonal layoff of not more than three months.

This credit is fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

Claiming the credit

File a completed Schedule 384, Manitoba Co-op Education and Apprenticeship Tax Credit, with the return. See the schedule for more details.

Enter the amount of the non-refundable credit you are claiming on line 603 of Schedule 5, Tax Calculation Supplementary - Corporations.

Enter the amount of the refundable credit you are claiming on line 622 of Schedule 5.

Forms and publications

• Schedule 384, Manitoba Co-op Education and Apprenticeship Tax Credit
• Schedule 5, Tax Calculation Supplementary - Corporations

Government partners

• Manitoba (provincial site)