Updated June 2026 · Verified against Government of Ontario (administered via Canada Revenue Agency — Schedule 550 / Form ON479) guidelines
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Tax Credit Provincial Active

Ontario Co-operative Education Tax Credit (OCELC)

Government of Ontario (administered via Canada Revenue Agency — Schedule 550 / Form ON479)
Maximum Credit
25–30% of eligible costs
Ongoing — claimed annually on corporate tax return for the year the placement...
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Difficulty
Easy
Payment
Tax Credit Offset
Trend
Stable
First-Timers
Friendly ✓
Credit rate
30%
Ontario Co-operative Education Tax Credit (OCELC) provides up to 25–30% refundable tax credit on co-op student wages; maximum $3,000 per qualifying work placement. A refundable Ontario tax credit that reimburses businesses for hiring post-secondary co-op students. Applications are accepted on an ongoing basis.
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Eligibility & Details

What this program funds and who can apply

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Program Description

A refundable Ontario tax credit that reimburses businesses for hiring post-secondary co-op students. Eligible employers claim 25–30% of wages paid to qualifying work placement students, up to $3,000 per placement per tax year. The credit is refundable, meaning companies receive a cash refund even if they owe no Ontario tax. Smaller businesses (prior-year payroll of $400,000 or less) receive the higher 30% rate.

Eligibility Requirements

  • Corporations or unincorporated businesses with a permanent establishment in Ontario
  • Subject to Ontario corporate income tax or Ontario personal income tax
  • Must hire students enrolled in a formally approved post-secondary co-operative education program
  • Work placement must be developed and/or approved by an eligible Ontario educational institution
  • Student must perform productive work (not observation only) and receive compensation
  • Placement must be a minimum of 10 consecutive weeks (regular co-op) or 8–16 consecutive months (co-op internship)
  • Employer must supervise and formally evaluate the student's performance
  • Educational institution must monitor student progress during the placement
  • Eligible institutions: Ontario universities and colleges of applied arts and technology whose enrolment counts toward Ontario operating grant entitlements, plus the Michener Institute, Ontario College of Art and Design and Redeemer University College. There is no public list of qualifying programs, so confirm with the institution's co-op office
  • Members of a partnership other than limited partners may share the credit for each qualifying work placement; a limited partner's share is nil
  • Consecutive placements with two or more associated corporations count as one employer, and the corporations must designate which one claims
  • The student's program itself must be a qualifying co-operative education program: placements of at least 10 consecutive weeks, at least half of them mandatory, totalling 30% to 75% of the time spent in required academic study, credited toward a degree, diploma or certificate, and filed with the Minister of Finance by the institution's governing body. Only the institution can confirm this, and it is the usual reason a placement is refused certification
Provinces
Ontario
Industries
All
Business Stage
Startup Growth Expansion Established

Quick Assessment

Difficulty
Easy
Competition
Low
First-Timer
Friendly

Funding Details

Amount
25–30% refundable tax credit on co-op student wages; maximum $3,000 per qualifying work placement
Type
Tax Credit
Level
Provincial
Credit rate
Up to 30% of eligible costs
Deadline
Ongoing — claimed annually on corporate tax return for the year the placement ends

Program Scorecard

Competition, effort, and approval at a glance

Competition
Low
Deadline
Ongoing
Approval
Entitlement
Accessibility
--/5
Competition
--/5
Approval Rate
--%
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How to claim

Insider tips, common pitfalls, and what successful applicants look like

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Insider Tip

The credit is often missed by SMBs because it requires a certification letter from the school — many employers forget to request this.

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Success Profile

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Evaluation Criteria

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What's in this Playbook

Everything you need to claim OCELC

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Application Playbook

Step-by-step process, required documents, and expenses

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Application Steps

1 Obtain a certification letter from the educational institution At the start of the placement, contact the co-op coordinator at the student's university or college and request a letter confirming the work placement meets the program's co-op requirements. This is required for CRA.

Required Documents 5

✓ Letter of certification from the educational institution naming the student, the employer, the institution, the term of the placement and the program. Keep it, do not file it: CRA tells you not to submit it with the return, and to produce it if asked
✓ Records of wages and taxable benefits paid to the student during the placement period

Eligible Expenses 3

Ineligible Expenses 7

Claim timing

Deadline Notes

Ineligible Organizations

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Funding Stack Strategy

Compatible programs, clawback risk, and combined funding potential

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Compatible Programs

Student Work Placement Program (SWPP) — federal Manitoba Co-op Tax Credit (ids 461, 462 in catalog)
Combined Funding Potential See your total funding potential

Clawback Risk

Low Risk

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How OCELC Compares

Side-by-side with similar programs

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Program Amount Difficulty Payment Deadline
Ontario Co-operative Education Tax Cr... 25–30% Easy Tax Credit Offset Ongoing — claimed...
Student Work Placement Program (SWPP) Up to $5,000 Easy Reimbursement Ongoing
Ontario Job Grant (formerly Canada-On... Up to $10,000 per employee Easy Varies Ongoing — year-round...
Ontario Innovation Tax Credit Up to 8% tax credit Moderate Tax Credit Offset Ongoing
Commercial Façade Improvement Grant P... Up to $12,500 (50% of costs) Easy Reimbursement Annual Intake

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Frequently Asked Questions

Quick answers to the questions founders most often ask about OCELC

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Is this credit refundable even if I owe no Ontario tax?
Yes — the OCELC is refundable. If your Ontario tax credit exceeds your tax payable, the excess is paid to you as a cash refund.
What's the difference between the 25% and 30% rates?
Employers with a prior-year Ontario payroll of $400,000 or less receive 30%. Those with payrolls of $600,000 or more receive 25%. Companies between $400K and $600K receive a sliding rate between the two.
Do I need to apply anywhere before hiring a co-op student?
No — this is an entitlement tax credit. No pre-approval is needed. Simply hire the student, get the certification letter from the school, and claim the credit when filing your tax return.
Can I combine this with the federal Student Work Placement Program (SWPP)?
Yes — but the SWPP amount you receive reduces the eligible wages for the Ontario credit. Whether the combination still leaves you ahead depends on your own wage and expenditure numbers, so model it with your accountant to avoid over-claiming.
What happens if I forget to get the certification letter?
The credit requires a valid certification letter from an eligible institution. CRA may disallow the claim on audit without it. Request the letter at the start of each placement.
Is the credit itself taxable?
Yes. The full amount has to be reported as income in the tax year you receive it, so a $3,000 credit is worth less than $3,000 after tax. If you run an unincorporated business, the amount you claim for one year goes on the next year's return as self-employment income.

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