For those living in Canada who wish to take up training courses to enhance their career prospects, help is readily at hand. Financial assistance from the government in the form of training credits is available. This article examines how the Canadian tuition credit system (known as the Canada Training Credit) works and how you can claim this valuable benefit.
What is the Canada Training Credit (CTC)?
CTC is a tax credit that is refundable which assists Canadian citizens with the costs involved in training. The credit increases every year by $250 to a maximum of $5,000 during an individual’s lifetime. In order to build credits for the training scheme, a person needs to be a wage earner who:
- Earns a minimum of $10,000 from their work (this includes parental or maternity benefits),
- Earns an income of less than $150,000,
- Is between 26 and 65 years old.
The CTC essentially allows people to be given tax credits through enrolling and partaking in course(s). It also helps the taxpayer to cut down on the taxes paid to the Canadian government. The person’s available training funds can be seen in the annual figures sent by the Canada Revenue Agency (CRA).
What is the Canada Training Credit Limit (CTCL)?
CTCL is the maximum training credit an individual is entitled to for the year. The CTCL equals a person’s Canada Training Credit (CTC) minus any Canada training credit claimed in the previous year plus the annual accumulation of $250 per year.
Conditions Required To Claim
Anyone living in Canada can claim the tuition credit if they meet all the following 6 conditions:
- Files an income tax and benefit return for the year,
- Canada training credit limit (CTCL) for the year is more than zero,
- Resident in Canada throughout the whole year,
- Fees were paid to an eligible educational institution,
- The course qualifies for tax credits,
- Age at least 26 years and less than 66 years at the end of the tax year.
What Educational Institutions And Courses Are Eligible?
Many establishments provide courses throughout Canada, but not all qualify for the CTC scheme. To be eligible, the courses must be from institutions that are:
- A university, college, or other educational institution in Canada providing courses at a post-secondary level, or
- An institution in Canada providing occupational skills courses certified by the minister of employment and social development.
You can find a list of Canadian institutions providing occupational skills courses here.
How To Claim the Canada Training Credit?
A person can claim the CTC when completing their annual income tax and benefit return. When Income tax and benefits are completed electronically online using software such as NETFILE, it will provide the instructions to enter CTC claims.
Those who file their taxes through paper returns need to complete Schedule 11, Federal Tuition, Education, and Textbook Amounts and Canada Training Credit, in their income tax package.
How Much Can You Get?
The amount of CTC you can claim is whichever amount is less from:
- A person’s Canada training credit limit (CTCL) for the tax year, or
- 50% of the eligible fees and other costs are paid to an eligible educational institution. These fees include the following items:
- Tuition fees,
- Examination costs,
- Ancillary charges (such as admission and exemption fees and certificate/diploma costs).
Closing Thoughts
The Canada Training Credit scheme is a great incentive to encourage lifelong learning and job training. It enables people in work to continue to train and increase their skill levels. Through training and education, Canadian residents can gain all the necessary skills to enhance their career options.
