The co-operative education credit (CETC) is a refundable tax credit that is eligible to claim a percentage of expenses incurred by a corporation for qualifying work placement programs. The maximum credit amount for each qualifying work placement is $1000 for a program ending ending before March 27, 2009 and $3000 for a program being after March 26th, 2009.
Eligible expenses include:
- Salaries (Including taxable benefits)
- Wages (Including taxable benefits)
- Fees payable to an employment agency
These expenses must be paid for employment or services, as applicable, at a permanent establishment of the corporation in Ontario. The eligible expenses must be directly related to the employee.
The following conditions must be met to be considered a qualifying work placement (WP) for the (CETC):
- The student performs employment duties for a corporation under a qualifying co-operative education program (QCEP);
- The WP has been developed or approved by an eligible educational institution as a suitable learning situation;
- The terms of the WP require the student to engage in productive work;
- The WP is for a period of at least 10 consecutive weeks or, in the case of an internship program, not less than 8 consecutive months and not more than 16 consecutive months;
- The student is paid for the work performed in the WP;
- The corporation is required to supervise and evaluate the job performance of the student in the WP;
- The institution monitors the student’s performance in the WP; and
- The institution has certified the WP as a qualifying work placement.
To claim the credit you will also need to keep a copy of the letter of certification from the eligible Ontario educational institution containing the name of the student, employer, the institution, the term of the work placement, and the name/discipline of the QCEP to support the claim.