You can claim the co-operative education tax credit if you are a corporation that provided a qualifying work placement at a permanent establishment in Ontario for a student enrolled in a qualifying post-secondary co-operative education program.
The credit is equal to an eligible percentage (25% to 30%) of the eligible expenditures incurred by the corporation for a qualifying work placement. The maximum credit for each qualifying work placement is $3,000.
To be a qualifying work placement, the work placement must meet all of the following conditions:
- the student must perform employment duties for a corporation under a qualifying co-operative education program;
- the placement must be developed or approved by an eligible educational institution as a suitable learning situation;
- the terms of the placement must require the student to engage in productive work;
- the placement must be for a period of at least 10 consecutive weeks except, in the case of an internship program, the placement cannot be less than 8 consecutive months and not more than 16 consecutive months;
- the corporation must supervise and evaluate the job performance of the student;
- the institution must monitor the student's performance in the placement;
- the institution must certify the placement as a qualifying work placement; and
- the student must be paid for the work performed.
Eligible expenditures are:
- salaries and wages (including taxable benefits) paid or payable to a student in a qualifying work placement; or
- fees paid or payable to an employment agency for the provision of services performed by the student in a qualifying work placement.
Claiming the credit
File a completed Schedule 550, Ontario Co-operative Education Tax Credit, with your return. Keep a copy of the letter of certification from the eligible educational institution in Ontario to support your claim.
The letter of certification must contain:
- the name of the student;
- the name of the employer;
- the name of the educational institution;
- the term of the work placement; and
- the name/discipline of the qualifying co-operative education program.
For more information on the credit, see the schedule and section 88 of the Taxation Act, 2007 (Ontario).
On line 452 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the refundable credit you are claiming.
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