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Canada’s labour market is evolving. As more businesses adopt automation and digital technologies, some jobs are becoming obsolete while new positions are in high demand. Many managers are either struggling to find talent knowledgeable in the latest technologies or looking for ways to upgrade the skills of current employees. To ensure workers’ job security, the federal government introduced a new talent initiative called the Canada Training Credit to help close the skills gap in the labour market and encourage Canadians to stay up-to-date with technological advancements.
What is the Canada Training Credit?
New for the 2020 tax year, the Canada Training Credit (CTC) is a refundable tax credit that helps Canadians cover the cost of eligible training fees. You can use it to claim tuition and other fees paid for courses you take.
Who qualifies for the Canada Training Credit?
You’re eligible for the CTC if you meet all the following conditions during the tax year:
- you’re between the ages of 26 and 65
- your total working income is more than $10,100 (includes maternity and parental benefits)
- your individual net income doesn’t exceed $150,473
- you’re a Canadian resident
- you file a tax return
- your CTC limit for the year is greater than zero
- tuition or other fees were paid to an eligible educational institution for courses you took in the year for which you’re claiming the credit, or to certain bodies for an occupational, trade, or professional examination
- the tuition and fees are eligible for the existing tuition tax credit
What counts as an eligible educational institution?
An eligible educational institution is either:
- a Canadian university, college, or other educational institution offering courses at a post-secondary level
- a Canadian institution providing occupational skills courses and certified by the minister of employment and social development
How much can I get from the Canada Training Credit?
Beginning in 2019, the CTC accumulates at a rate of $250 per year for eligible workers, up to a lifetime maximum of $5,000. You stop accumulating the CTC when you hit the lifetime maximum or when you turn 65 years old, whichever happens first. As a refundable tax credit, the CTC reduces the amount of tax you owe. You may get a refund if the credit is more than your tax owing.
How do I calculate my credit amount?
When claiming the CTC, your amount is the lesser of:
- half of the eligible tuition and fees you paid for the year
- your CTC limit for the tax year
The easiest way to calculate your CTC amount is with the following formula:
[CTC limit from previous tax year] + [annual accumulation of $250 (if eligible)] – [CTC claimed in the last year]
Let’s say it’s 2023 and you take a course to upgrade your skills. You pay $3,000 for tuition to an eligible Canadian college. You were eligible to accumulate $250 every year from 2019 to 2022 and have yet to claim the CTC.
Formula: $750 + $250 - $0 = $1,000
In this scenario, you could claim $1,000 as it’s the lesser amount between your CTC limit ($1,000) and half of your eligible tuition fees ($1,500).
You’ll accumulate another $250 for 2024, 2025, and so on, as long as you continue to meet all CTC requirements and haven’t hit the lifetime maximum or reached the age of 65.
How do I claim the Canada Training Credit?
The CTC is claimed on line 45350 on your tax return. Follow the instructions in your certified tax software or fill out Schedule 11 if you’re filing a paper return.
Where can I find my Canada Training Credit limit?
You can find your CTC limit on your latest notice of assessment or in your CRA My Account.
Can I claim the tuition tax credit too?
Yes, but keep in mind your tuition amount will be deducted by the CTC amount you claim. For example, if your eligible tuition amount is $5,000 and you claim $500 for the CTC, the amount used to calculate your tuition tax credit will be $4,500.
