20 Jan TEACHERS: This Credit Is for You!
The Eligible Educator School Supply Tax Credit, worth 15% on up to $1,000 of eligible supply expenses, has now become law. To mark the occasion, CRA has published a Question and Answer providing commentary on this new refundable tax credit available in 2016 and subsequent years. The credit is also referred to as the Teacher and Early Childhood Educator School Supply Tax Credit.
The new tax credit can only be claimed by an eligible teacher or early childhood educator employed at an elementary or secondary school or a regulated child care facility. The employee must either:
- hold a teacher’s certificate that is valid in the province or territory in which they are employed (eligible teacher); or
- hold a certificate or diploma in early childhood education that is recognized in the province or territory in which the individual is employed (eligible early childhood educator).
What Expenditures Qualify?
An eligible supply expense is an amount paid in the year for supplies used or consumed in the school or regulated child care facility in the performance of the taxpayer’s employment. Supplies include:
- consumable goods such as construction paper, flashcards, items for science experiments, art supplies, and stationary items; and
- durable goods limited to games, puzzles, books, containers and educational support software. Computers, tablets and rugs (for kids to sit on) are provided as examples of expenses which are not eligible.
The expense must not be reimbursable, nor subject to an allowance or other form of assistance. As well, the credit cannot be claimed for an expense which is deducted by any person for the year. The credit is available for the year in which it was purchased rather than when it was used.
CRA may ask taxpayers to provide certification from their employer attesting to the eligible supplies expense. The certification should be a statement signed by the individual’s employer that attests that the supplies were used for the purpose of teaching or facilitating students’ learning, directly consumed in an appropriate facility in the performance of the individual’s employment duties, and amounts paid were not reimbursable or otherwise deducted in income calculation. Employers providing this certification should not also provide a T2200, Declaration of Conditions of Employment, in relation to those supplies.
Taxpayers should request the certification from their employer in a timely manner and keep it in their files, along with their receipts for the supplies.
Action Item: Eligible Teachers and Educators – Keep receipts from the purchase of eligible supplies in the year.
This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.