The Ontario and Federal Governments have offered the Ontario
Apprenticeship Training Tax Credit incentive for a while now and although most
dealership owners take advantage of it, there are still many out there that
either don’t claim the credit or don’t feel it’s worthwhile.
There is an Ontario and Federal combined credit of
approximately $12,000 for every year that a dealership employs an eligible
apprentice. The credits are filed in connection with the annual corporate tax
filings for the corporation.
There are certain nuisances to the credit that an accountant
can work through, yet for the most part, as long as all conditions are met (which
is generally the case for an apprentice hired to work in the service department
of a new auto dealership), the credit can be quite significant as many dealers
hire multiple apprentices over multiple years.
I am an accountant after all so humour me while I do a
little math: let’s say a dealership hires 2 apprentices every year for 3 years
– that’s approximately a $72,000 credit
($12,000 x 2 x 3), or ~$61,000 after taxes. That must be worthwhile to any
dealership owner.
I think what prevents owners from taking action is the fear
of time spent and wasted. However, even if you spend an hour or two with an
account and it turns out you don’t qualify, you’ll know what you need to do
next year to start qualifying moving forward. Or at least you won’t be left
wondering if you’re missing out on significant money. Seems like a win-win
situation to me.
Also note that if you have not filed credits for prior years,
there is an opportunity to amend prior year tax returns and file the necessary
paper work for the credit.
As a side note: it’s important that your dealership maintains
the required records, including contracts, as it’s quite common for the CRA to
request this information following the filing of the corporate tax returns.
- David
