The Co-operative Education Tax Credit (CETC) is a refundable tax credit that is available to employers who hire students enrolled in a co-operative education program at an Ontario university or college.
The CETC is a refundable credit of 25% (30% for small business) up to a maximum of $3,000. Most work placements are for a minimum employment period of 10 weeks up to a maximum of four months.
The CETC is based on salaries and wages paid to a student in a co-operative education work placement. Fees paid or payable to an employment agency for the work placement for services of a student carried out are also eligible.
An eligible employer includes all corporations or unincorporated businesses with permanent establishments in Ontario subject to Ontario corporate income tax or Ontario personal income tax. To qualify, a work placement must involve a student who is enrolled at an eligible educational institution and performs employment duties for an eligible employer under a qualifying co-operative education program that is offered by their school. The work placement must meet the following conditions:
- The placement has been developed or approved by the eligible educational institution
- The student must be engaged in productive work during the placement and not be just an observer
- The work placement is:
- not less than eight months or more than sixteen months, for a qualifying internship program or
- at least 10 weeks for all other qualifying co-operative education programs
- The student is paid for the work performed during the placement
- The employer supervises and evaluates the student’s job performance during the placement and
- The educational institution monitors the student’s progress in the work placement