Ontario co-operative education tax credit

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 (10% to 15%) of the eligible expenditures incurred by the corporation for a qualifying work placement. The maximum credit for each qualifying work placement is $1,000.

For eligible expenditures incurred after March 26, 2009, the eligible percentage is increased (25% to 30%) and maximum credit for each qualifying work placement beginning after this date is $3,000.

If the work placement straddles March 26, 2009, the maximum amounts are prorated.

Eligibility

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

To claim 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.

Forms and Publications

• Schedule 5, Tax Calculation Supplementary - Corporations
• Schedule 550, Ontario Co-operative Education Tax Credit

Government partners

• Ontario (Ministry of Revenue)
• Ontario (e-Laws)