Apprenticeship Tax Fun


June 4th, 2012

This article was written for the Business First publication……I’m posting it again here in case anyone missed it 🙂

 

What do bakers, chefs, electricians and hair stylists all have in common?  Well, for one thing, an apprentice employee working in any one of these trades may be eligible for grants of up to $4,000.  Each of these trades, plus many more of course, can be designated under the Red Seal Program.

There’s more good news for the employer who is hiring an apprentice in the Red Seal Program – the employer may also qualify for tax savings of up to $4,000.  This is possible through the Apprenticeship Job Creation Tax Credit.

So between the grants available to the apprenticed employee, and the grants available to the employer, the government is willing to dish out up to $8,000.  This sounds like a good deal, and it is. Let’s look at this further through a “real life” example.

Raymond, a young 19 year old, is a resident of Stewiacke, Nova Scotia.  He is enrolled in courses to become an electrician.  He has successfully completed his first year of school and has obtained employment as an apprenticed electrician, working for Coastal Electrical, a local company. Upon finishing his first year of apprenticeship, he applied for the Apprenticeship Incentive Grant and received $1,000.

Raymond is eligible to receive another $1,000 grant after he completes his second year of apprenticeship.  He is also looking forward to completing his apprenticeship program, after which he can apply for the Apprenticeship Completion Grant and receive a final $2,000.

Coastal Electrical, the local electrical company that hired Raymond, is also eligible for some decent tax savings.  Under the Apprenticeship Job Creation Tax Credit, a business that hires an eligible apprentice can receive a tax credit of 10% of the wages paid to the apprentice, up to a maximum of $2,000 per year.  An eligible apprentice is one who is in his or her first two years of apprenticeship contract.

Coastal Electrical hired Raymond in 2012 and paid him a salary of $30,000.  When Coastal Electrical files its tax return for 2012, they will be eligible to reduce their federal taxes payable by a total of $2,000.  If Raymond remains employed by them for the full two years of his apprenticeship contract, they will be able to claim this tax credit again in the second year.

The Apprenticeship Incentive and Completion Grants, and the Apprenticeship Job Creation Tax Credit, have been around for a few years and are fairly well known by now.  Perhaps what is less well known is how many different types of trades can qualify for these grants / tax credits.  A full list of eligible trades can be found at www.red-seal.ca and includes the well known Red Seal trades (electrician, mechanic, plumber) but also some less well known trades (baker, cook, hair stylist, partsperson).

For more information on the Apprenticeship Incentive and Completion Grants, visit www.servicecanada.gc.ca.  For more information on the Apprenticeship Job Creation Tax Credit, visit www.cra.gc.ca

Next issue, we’ll take a look at how students like Raymond can qualify for up to $15,000 more in tax savings!   Please note that the above “real life” example uses fictional names.  Any resemblance to any actual person or business is strictly coincidence. 


 

Filed under: Business tax, Personal Tax by David Boese No Comments »




2012 Federal Budget


March 13th, 2012

Mark the date on your calendars……..March 29, 2012.

This is the date the Conservative government releases its 2012 federal budget.  What is a federal budget?  To a tax person, a large part of the budget is the government’s announcements on what type of new tax changes are coming.  This is when most new tax policies are announced, so it’s always interesting to see what direction the tax world is headed.

Most large news outlets have some fairly decent coverage on budget day, but if you want the details, head over to www.fin.gc.ca.  I’ll try to post some of the more interesting tid-bits as well, provided there is anything new worth talking about!

Filed under: Personal Tax by David Boese No Comments »




I’ve written about this tax credit before, but it’s definitely worth talking about again.  The Nova Scotia Graduate Retention Rebate is worth from $7,500 to $15,000 in actual tax savings, over a 6 year span.

If you are a recent college or university graduate, and you are living in Nova Scotia, be sure to check this one out.

http://www.gov.ns.ca/finance/en/home/taxation/personalincometax/grr.aspx

Filed under: Personal Tax by David Boese 2 Comments »




This is a reminder for Nova Scotia seniors, who are receiving the Old Age Security Guaranteed Income Supplement (GIS).

Tax Refund for Seniors receiving Guaranteed Income Supplement (GIS)

In the 2010-11 provincial budget, the Minister of Finance committed to a new program to help low income seniors make ends meet. The program provides a refund of the provincial income taxes paid by seniors who receive the Guaranteed Income Supplement (GIS).

In total, about $9 million will be returned to about 18,000 seniors this year.

The Department of Finance used information from 2010 tax returns to assess eligibility and process the refund. The program is in accordance with new regulations under the Income Tax Act.

Seniors do not have to apply for this refund, but they must file their tax return each year.

Individuals who did not file a return in this taxation year, but who are eligible, can still receive the refund when they file their tax return.

If you have questions about this tax refund, please call 1-800-670-4357.

http://www.gov.ns.ca/finance/en/home/taxation/personalincometax/seniorsgis.aspx

If you are a senior who currently received the base Old Age Security pension, you may be entitled to the GIS.  You can check by going to the this link.

http://www.servicecanada.gc.ca/eng/isp/oas/tabrates/tabmain.shtml

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