Co-op Tax Credit

June 07, 2017


Employers who hire students enrolled in a co-operative (Co-op) education program at an Ontario university or college are eligible to apply for the Co-operative Education Tax Credit. The Co-op tax credit is a refundable tax credit that creates a reciprocal relationship in which the student and employer can both benefit greatly.

The government seeks to connect companies with ambitious and diligent students from across Ontario through the Co-op Tax Credit. In doing so, students have the opportunity to gain valuable work experience that can contribute to a more successful undergrad and future. Employers will also benefit from having a fresh perspective supporting their business. 

The Co-op Tax Credit’s funding is based on the wage and salary that the student in the co-op education work placement would receive. Corporations can claim 25% of eligible expenditures and small businesses can claim 30% of eligible expenditures. Each qualifying work placement can receive a maximum credit of $3,000. The employment period for most work placements is a minimum of ten weeks up to a maximum of four months. 

This funding program accepts applications throughout the year.

Who is eligible?

Eligibility is outlined by the following details; a work placement must consist of a student who is enrolled at a qualified educational institution, who executes duties that fall in line with their school’s co-op program specifications and do so for an eligible employer. 

The work placement is required to have the following:

  • The placement has been developed or approved by an eligible educational institution
  • The student must engage in productive work and not just be an observer
  • For qualifying internship programs the placement is no less than eight months but no more than sixteen months
  • For all other qualifying co-op education programs, the placement must be at least ten weeks
  • Student must be paid for duties
  • The employer is obligated to supervise and evaluate the student’s job performance

How can BDO help?

BDO’s Advisory Services group can help prepare you for the Co-op Tax Credit and application process. BDO is available to assist with activity scoping to determine eligibility and technical and financial application preparation. As well, we can provide a strategic approach in determining how government grants and incentives, including the Co-op Tax Credit, fit into your company’s future growth plans. For more information, contact your local BDO office.