Article written by Alexandre Varennes, M. Fisc.
In Quebec, a corporation or partnership can take advantage of a tax credit for some of its employees who qualify for the on-the-job training program. An employer may be entitled to a credit under one of two streams: the program for full-time students enrolled in a recognized educational institution, or the program for apprentices enrolled in the Workplace Learning Program (WLP).
Employers eligible for the employment tax credit
To qualify, a corporation or partnership must meet the following criteria and conditions:
- It has a permanent establishment in Quebec and carries on a qualifying business there;
- It is not tax-exempt;
- It is not a Crown corporation or a wholly controlled subsidiary of such a corporation;
- For the full-time student program, she has obtained the Attestation de participation à un stage de formation admissible form (CO-1029.8.33.10) signed by a representative of the recognized educational institution within six months of the end of the internship;
- For the apprenticeship program, she has obtained a certificate from the Ministère du Travail, de l’Emploi et de la Solidarité sociale or the Kativik Regional Government within six months of completing the internship.
If all these conditions are met, a corporation or partnership may be entitled to a tax credit for training.
Programs
For the full-time student program, the intern must be a student enrolled in a high school, college or university program, or in a prescribed program offered by a recognized institution. Student internships must also total at least 140 hours.
For the apprentice program, the trainee must be a registered apprentice in the Workplace Learning Program, administered by the Ministère du Travail, de l’Emploi et de la Solidarité sociale or by theKativik Regional Government.
Eligible expenses
In terms of employer expenses, only certain expenses can be considered eligible for the credit. In addition, government assistance and other tax credits received under other programs reduce the balance of eligible expenses. Eligible expenses must be calculated for each week of internship by adding the following items:
- The hourly wage received by the trainee for the period of the training course, multiplied by the number of hours worked during the week. As of March 28, 2018, this amount is limited to $21 per hour;
- The hourly wage received by the supervisor for the trainee’s supervision period, multiplied by the number of hours during the week. As of March 28, 2018, this amount is limited to $35 per hour;
- Travel expenses paid by the company on behalf of an employee other than the trainee. However, the internship must be one of the prescribed programs offered by a recognized educational institution.
For the full-time student program, the internship credit rates are as follows:
| Trainee | Resource regions | Other regions | |||
| Base rate | Subsidized rate | Base rate | Subsidized rate | ||
| Disabled, immigrant or native | 32 % | 50 % | 32 % | 50 % | |
| Other person | 32 % | 50 % | 24 % | 40 % | |
Subsidized rates and credit for apprentices
To qualify for the enhanced rate, employers must claim the credit for at least the third consecutive year, and must have paid eligible expenses of at least $2,500 in each of the two preceding years.
For the apprentice program, the internship credit rates are as follows:
| Trainee | Expenses incurred from March 28 to March 25, 2021 or after April 30, 2022 | Expenses incurred from March 26, 2021 to April 30, 2022 | ||
| Resource regions | Other regions | Resource regions | Other regions | |
| Disabled, immigrant or native | 32 % | 32 % | 40 % | 40 % |
| Other person | 32 % | 24 % | 40 % | 30 % |
The regions defined as resource regions are as follows: Bas-Saint-Laurent, Abitibi-Témiscamingue, Nord-du-Québec, Antoine-Labelle RCM, Mékinac RCM, La Tuque, La Bostonnais, Lac-Édouard, Saguenay-Lac-Saint-Jean, Côte-Nord, Gaspésie-Îles-de-la-Madeleine, La Vallée-de-la-Gatineau RCM and Pontiac RCM.
Federal work experience tax credit
The internship credit is available only in Quebec; there is no equivalent at the federal level. Nevertheless, it is sometimes possible for certain companies to also benefit from the investment tax credit on expenditure to create apprentice jobs. This credit is applicable to tradespeople with the “Red Seal” designation, which includes, among others, electricians, bakers and heavy equipment operators.
How do I claim credit?
The internship credit is claimed on the company’s Québec income tax return. A corporation or partnership entitled to a credit has 18 months after the end of its fiscal year to apply for the credit.
Please consult one of our experts to find out more about internship credit.
