Canada Training Credit (CTC)
What is the Canada Training Credit (CTC)?
The CTC is a refundable personal tax credit which will reimburse up to half of eligible tuition and fees associated with work-related training. The CTC is claimed on the personal income tax and benefit return. Eligible individuals will accumulate $250 each year in a notional account for this purpose. The account balance will be included on Notices of Assessment and made available through My Account and Represent a Client.
The credit available for a taxation year will equal the lesser of:
half of the eligible tuition and fees paid in respect of the taxation year; and
the individual’s notional account balance accumulated in respect of previous years.
Tuition and other fees eligible for the CTC will generally be the same as under the existing rules for tuition tax credits (see CRA Folio S1-F2-C2, Tuition Tax Credit, for example Paragraph 2.7 and 2.9 for details). For example, the purpose of the enrolment must be to provide the individual with the skills, or to improve the individual’s skills, in an occupation. Amounts refunded through the CTC will not also be eligible for the tuition tax credit. A claim for the credit will require the individual to be resident in Canada throughout the year of claim.
In order to accumulate the $250 amount in respect of a year, an individual must:
file a tax return;
be at least 25 years old and up to 64 years old at the end of the year;
be resident in Canada throughout the year;have earnings (primarily income from employment or self-employment, but also including parental employment insurance benefits and tax-exempt earnings of status Indians and emergency service volunteers) of $10,000 or more in the year; and
have net income that does not exceed the third tax bracket ($150,473 in 2020).
Individuals will be able to accumulate up to a maximum amount of $5,000 over a lifetime. Any unused balance will expire at the end of the year in which an individual turns 65.
The first $250 will be added to the notional account for 2019, so the credit will first be available for expenses in the 2020 taxation year.
Can fees paid in 2019 qualify for a claim in 2020, if the course was taken in 2020?
Yes. The Canada training credit (Section 122.91) and tuition tax credit (Section 118.5) allows a claim for the eligible tuition fees paid in respect of the taxation year, subject to certain maximum amounts. That is, the tuition fees paid for a course taken in 2020, assuming they otherwise qualify, are eligible for claim in the 2020 year regardless of the date of payment of the tuition fees.
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