If you’re an employer in the British Columbia shipbuilding and ship repair industry who employed apprentices, you might be able to claim a refundable tax credit for the salaries you paid them. Keep in mind, even though this is a refundable tax credit, it needs to first be applied against your total income tax payable.
To qualify for the shipbuilding and ship repair industry tax credit, you must be an employer whose main business is to build, repair, or convert ships. Additionally, the apprentice must be registered with the Industry Training Authority (ITA) and take part in an eligible apprenticeship program.
Tax tip: Even if your apprentices don’t qualify for this tax credit, you might still be able to claim the training tax credit.
There are three elements to the shipbuilding and ship repair industry tax credit and you’ll need to complete the T1014-2 form to calculate these amounts:
- Claim the basic tax credit in part 2 if you employed a person registered in an eligible training program (such as Red Seal or non-Red Seal) in 2018. Salary and wages are amounts paid to your employee within 24 months of the date they entered the program, for the tax year.
- Claim the completion tax credit in part 3 if your employee completed an eligible training program (such as Red Seal or Non-Red Seal) and achieved level 3 or 4 requirements in 2018. This credit can still be claimed if the employee left your employment in 2018 after completing the level. Salary and wages are paid or payable within a 12-month period, ending the month of the program completion date. See the previous page of the form if your employee completed more than one level in a year.
- Claim the enhanced tax credit in part 4 if your employee is eligible for the disability amount from line 316 of their Schedule 1 (federal) or is considered an Indian in the Indian Act (Canada).
Note: This tax credit can only be claimed for salaries and wages paid to eligible apprentices after September 30, 2012 and before January 1, 2020.
Where do I claim this?
Follow these steps in H&R Block’s 2018 tax software:
Before you begin, make sure that you told us that you lived in British Columbia on December 31, 2018.
- Under the PREPARE tab, click the IN THIS SECTION icon.
- In the Self-employment income and expenses box, click the Add This Topic button.
- Click the EMPLOYMENT icon. You’ll find yourself here:
- Under the CREDITS AND REBATES heading, select the checkbox labelled British Columbia shipbuilding and ship repair industry tax credit for employers (T1014-2) and click Continue.
- When you arrive at the page for your British Columbia shipbuilding and ship repair industry tax credit for employers, enter your information into the tax software.