Budget 2019 proposed a new Canada Training Credit (CTC), a refundable tax credit which will reimburse up to half of eligible tuition and fees associated with work-related training. 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 lessor of:
- Half of the eligible tuition and fees paid in respect of the taxation year: and
- The individual's normal 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 credit. However, foreign educational institutions will not generate eligible tuition. Amounts refunded through the CTC will not be eligible for the tuition tax credit. A claim for the credit will require the individual to be a resident in Canada throughout the year of the 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 ($147,667 in 2019).
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 the individual turns 65.
The first $250 will be added to the notional account for 2019, so the credit will first be available for expense the 2020 taxation year.