Training and Taxes
Hello All,
Most people would agree that lifelong learning is a good thing. It helps to keep you sharp, improves confidence and likely makes you more interesting at parties (assuming you don’t nerd out too much :)). It can also be quite gratifying to acquire new knowledge or a new skill, especially in an area of interest.
In Canada, there are also some tax benefits to be had from training. On an individual level, you are eligible for the tuition tax credit or the training tax credit assuming you :
File an income tax return
You were a Canadian resident for the full year
Tuition or other fees were paid to an eligible educational institution for courses that you took in the year that you are claiming the credit for or to certain bodies for an occupational, trade or professional examination
A list of eligible educational institutions can be found here
Note that in order to qualify for either the tuition tax credit or the training tax credit, you must receive form T2202 from the educational institution where you received the training.
The difference between the tuition tax credit and the training tax credit is that the former is non refundable i.e. it simply reduces your taxes payable while the latter is a refundable tax credit meaning that if the amount of the credit exceeds your income tax payable, then you will receive a refund.
If you are a business owner, you can also claim training, seminar and conference expenses. The benefits of ongoing learning as mentioned above can be significant. It can make you aware of developments in your area of expertise, helps improve either your skills and/or your processes and often provides you with the confidence that is palpable when you meet a prospective customer. Additionally, it might open up networking opportunities and some time types of training will help you identify and meet with your ideal clients. By improving your business related expertise, you might also be able to increase the price of your goods or services. My blog post this week discusses the deductibility of these types of expenses and specific rules that need to be taken into consideration.
Blog Post
Guidelines For Deducting Conference and Training Expenses
Attending conferences and investing in ongoing training can be a great way for small business owners and the self employed to keep current on industry developments, ensure ongoing professional develop
