Apprenticeship Job Creation Tax Credit (AJCTC)
Compared with the 242 other application forms we have read
- Scored mainly on the jobs it creates for other people. 22 lead with that.
- Most rejections here are settled before you write a word: they turn on who you are, not how well you argue.
Can you claim this credit?
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Eligibility & Details
What this program funds and who can apply
Program Description
Non-refundable investment tax credit equal to 10% of eligible salaries and wages paid to apprentices in prescribed Red Seal trades during their first two years of apprenticeship. Maximum credit of $2,000 per apprentice per year. Available to all employers — corporations, sole proprietors, and partnerships. Carries back 3 years and forward 20 years.
Eligibility Requirements
- Any employer whose business income is subject to federal Part I tax — corporations, sole proprietors and partnerships — hiring apprentices in a trade that is a prescribed Red Seal trade for the province where the apprentice works
- Apprentice must be in first 2 years of apprenticeship program
- Available to corporations, sole proprietors, and partnerships
- Valid apprenticeship contract must be in place
- If a related company (s.251(2)) also employs the same apprentice, all related employers must agree in writing that you are the only one claiming — without it the claim is nil for everyone.
Quick Assessment
Funding Details
- Amount
- 10% of eligible salaries, max $2,000 per apprentice per year
- Type
- Tax Credit
- Level
- Federal
- Credit rate
- Up to 10% of eligible costs
- Deadline
- Ongoing
Program Scorecard
Competition, effort, and approval at a glance
Very accessible — simple application
Low competition — good odds of approval
Simple — quick application
How to claim
Insider tips, common pitfalls, and what successful applicants look like
Insider TipThis is one of the most accessible tax credits in Canada — any employer with a Red Seal apprentice in their first 2 years qualifies automatically.
Success Profile
Evaluation Criteria
How Canada Revenue Agency judges your application
What the reviewer scores, what gets applications rejected, and what to write.
Distilled from 6+ source documents, condensed into one brief. Sources as of 2026-09-04.
6 of the sources
- Apprenticeship job creation tax credit — Canada Revenue Agency canada.ca
- Schedule 31, Investment Tax Credit — Corporations canada.ca
- Form T2038 canada.ca
- Income Tax Regulations, s. 7310 — prescribed trade laws-lois.justice.gc.ca
- Income Tax Act, s. 127 — definitions in s.127 laws-lois.justice.gc.ca
- T4012, T2 Corporation – Income Tax Guide — Chapter 7, Schedule 31 /… canada.ca
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What Canada Revenue Agency favours
Hire an eligible apprentice to claim the credit◦
“If your business hires an eligible apprentice, you qualify to claim the credit.”
The form
There is no application: the credit is claimed on the employer's annual income tax return, on Schedule 31 with the T2 for a corporation or on Form T2038(IND) with the T1 for an individual, partner or trust.◦
Judged against
- 1
Is this person an eligible apprentice?
Show them Show the registered contract number, the trade name as registered, and the contract registration date that puts the apprentice inside the first 24 months.◦
In the funder’s words · 1
- If your business hires an eligible apprentice, you qualify to claim the credit.
- 2
Can you be the only claimant?
What to show, and the funder’s 1 criterion behind it in Premium
- 3
Is the wage base narrowed correctly?
What to show, and the funder’s 1 criterion behind it in Premium
Where applicants fail
“If not, you cannot claim the tax credit.”
“You have to file this form no later than 12 months after the filing due date of your income tax and benefit return for the tax year in which you acquired an ITC related property or made an ITC related expenditure.”
“Eligible salaries or wages do not include qualified expenditures incurred by the corporation in a tax year, remuneration based on profits, bonuses, taxable benefits including stock options, and certain unpaid remuneration.”
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5 more rules that can reject you · 1 more criteria
Do you pass?
Each one can rule you out. Tick the ones you meet.
Your business
Business carried on in Canada
10% of the eligible salary and wages payable by the taxpayer in the taxation year to the eligible apprentice in respect of the eligible apprentice's employment, in the taxation year and on or after May 2, 2006, by the taxpayer in a business carried on in Canada by the taxpayer in the taxation year
The trainee
Trade is Red Seal in province
For the purpose of the definition eligible apprentice in subsection 127(9) of the Act, a prescribed trade in respect of a province means, at all times in a taxation year, a trade that is, at any time in that taxation year, a Red Seal trade for the province under the Interprovincial Standards Red Seal Program.
Province trade is Red Seal
For the province, the trade must be a Red Seal trade.
Documents to attach
Ticks are kept on this device.
The money
Credit rate10% of eligible salary and wages
10% of the eligible salary and wages payable by the taxpayer in the taxation year to the eligible apprentice in respect of the eligible apprentice's employment, in the taxation year and on or after May 2, 2006, by the taxpayer in a business carried on in Canada by the taxpayer in the taxation year
Individual form ceilingLesser of eligible wages or $20,000
The lesser of eligible salary and wages payable in the year or $20,000
Carryback periodCarry back up to three years
You can carry back the ITC you earn in 2025 for up to three years and use it to reduce your federal tax in those years by completing Part E of this form.
Carry-forward expiryExpired after 20 tax years
Credit expired after 20 tax years
StackingNet of any government or non-government assistance
Net of any government or non-government assistance received or to be received in respect of eligible salary and wages.
Costs before approvalEmployment after May 1, 2006
in respect of employment after May 1, 2006
What it pays for · 1
- salary and wages payable by the taxpayer to the eligible apprentice in respect of the first 24 months of the apprenticeship
What it does not pay for · 5
- a qualified expenditure incurred by the taxpayer in a taxation year
- remuneration that is based on profits
- bonuses
- amounts described in section 6 or 7
- amounts deemed to be incurred by subsection 78(4)
From application to money
- Registration starts the clock24-month clock starts at contract registration
- File with your returnNo separate application; file with tax return
- Identify within 12 monthsIdentify expenditure within 12 months or lose credit
- Credit reduces Part I taxCredit reduces federal Part I tax
In the funder’s words · 4
- Registration starts the clock
- The 24-month clock runs from registration of the apprenticeship contract with Canada, a province or a territory.
- File with your return
- There is no separate application: the employer self-assesses and completes Schedule 31 with the T2, or Form T2038(IND) with the T1.
- Identify within 12 months
- The apprenticeship expenditure must be identified on the schedule within 12 months of the return's due date for the year it was incurred, or the credit is lost.
- Credit reduces Part I tax
- There is no assessment or correspondence; the credit reduces federal Part I tax on assessment, and unused amounts carry back or forward.
Quoted lines are word for word from the source documents; lines marked ◦ are our reading of them.
Everything you need to claim AJCTC
Not a marketing summary. The actual checklist, intel, and stack strategy reviewers look for.
- 5-document checklist with what each reviewer is actually checking
- Your Application Game Plan — the print-ready PDF the preview below describes
- 4-step application timeline with prep hours per step
- Insider tip from program officers on what separates winners
- 4-program stacking strategy to combine with compatible funding
- Success profile + evaluation criteria — exactly what the program administrators check
Application Playbook
Step-by-step process, required documents, and expenses
Application Steps
Required Documents 5
Eligible Expenses 3
Ineligible Expenses 6
Claim timing
Deadline Notes
Ineligible Organizations
Funding Stack Strategy
Compatible programs, clawback risk, and combined funding potential
Compatible Programs
Clawback Risk
Low RiskHow AJCTC Compares
Side-by-side with similar programs
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Frequently Asked Questions
Quick answers to the questions founders most often ask about AJCTC