Employed apprentice mechanics
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Employed apprentice mechanics
Even though you may have already claimed the tradesperson's deduction for tools, you may also be able to deduct a part of the cost of eligible tools you bought in 2024 to earn employment income as an eligible apprentice mechanic. This cost includes any GST and provincial sales tax, or HST, you paid.
You may be able to get a rebate of the GST/HST you paid. For more information, see employee GST/HST Rebate. When completing Form GST370, Employee and Partner GST/HST Rebate Application, see if Situation 6 applies to you.
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Eligible apprentice mechanic
You are an eligible apprentice mechanic if you meet all of the following conditions:
- You are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles)
- You are employed as an apprentice mechanic
As an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction, if any, that you qualify for. You may qualify for this deduction if you bought eligible tools for your job in 2024. You can then complete the calculation described in the section called Deduction for tools for an eligible apprentice mechanic to determine if you can also make this claim in 2024.
Eligible tools
An eligible tool is a tool (including associated equipment such as a toolbox) that meets all of the following conditions:
- You bought the tool to use in your job as an apprentice mechanic and it was not used for any purpose before you bought it
- The tool is certified by your employer as being necessary for you to provide as a condition of, and for use in, your job as an apprentice mechanic
- The tool is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating or calculating)
Your employer has to complete Form T2200, Declaration of Conditions of Employment. Have your employer complete question 13 of Part C of the form to certify that you bought and provided the tools you are claiming as a condition of your employment as an eligible apprentice mechanic. Attach to Form T2200 a list of the tools you are claiming, as well as the related receipts. You do not have to submit Form T2200 or your list of tools or receipts with your income tax and benefit return, but keep them in case the CRA asks to see them.
Note
If you are not an eligible apprentice mechanic, you cannot claim expenses for apprentice mechanic tools you purchased in 2024. However, you can claim any amount you are carrying forward from a prior year as long as it is not more than your net income on line 23600 of your income tax and benefit return.
You may qualify for other employment expenses. See Salaried employees.
Deduction for tools for an eligible apprentice mechanic
Even though you may have already claimed the tradesperson's deduction for tools, you may also be able to deduct a part of the cost of eligible tools you bought in 2024 to earn employment income as an eligible apprentice mechanic.
Use the following formula to calculate your maximum deduction for the cost of eligible tools you bought in 2024 if you were an eligible apprentice mechanic at any time in 2024:
Maximum deduction for eligible toolsFootnote 1 = (A − B) + C
where
A = the total cost of eligible tools that you bought in 2024Footnote 2
B = the lesser of:
1. the total cost of eligible tools that you bought in 2024 as calculated in A
2. the greater of:
- $1,000 + the Canada employment amount claimed on line 31260 of your income tax and benefit return (maximum $1,433)
- 5% of:
- your employment income as an eligible apprentice mechanic
- plus the amount you received in 2024 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs
- minus any claim you made for the tradesperson's deduction for tools, and the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2024
C = the amount, if any, of the maximum deduction for eligible tools that you calculated for 2023 that you did not claim in 2023 (your carry forward amount from 2023, if any)
- Footnote 1
-
This claim cannot be more than your net income for 2024 from all sources (the claim cannot create a non-capital loss).
- Footnote 2
-
If you become employed as an eligible apprentice mechanic for the first time during 2024, you will be able to increase the value of A in the above calculation by the cost of eligible tools you bought during the last three months of 2023.
Note
If you do not want to claim the maximum deduction, you can carry forward the unused amount for use against income earned in a future year. You can deduct the unused amount against any type of income in a future year even if you are no longer employed as an eligible apprentice mechanic at that time.
- Example
The Motor Company hired Bill as a second-year eligible apprentice mechanic on November 1, 2023. Based on the tools he bought during 2023, Bill calculated his maximum deduction for eligible tools in 2023 to be $3,500. He only claimed $1,500 of this amount on his 2023 income tax and benefit return. In 2024, Bill received $18,000 in income from his job as an eligible apprentice mechanic. In 2024, he received $1,000 under the Apprenticeship Incentive Grant program, and he also received income of $4,000 from other sources.
During September of 2024, Bill bought two eligible tools for $4,500. He already calculated and claimed a tradesperson’s tools deduction of $1,000 for 2024. He had also claimed a Canada employment amount of $1,433.
Bill calculated his maximum deduction for eligible tools in 2024 as follows:
Maximum deduction for eligible tools = (A − B) + C
where
A = $4,500
B = the lesser of:
1. $4,500
2. the greater of:
- $2,433 ($1,000 + $1,433)
- $900 [5% of ($18,000 + $1,000 − $1,000)]
C = $2,000
Therefore, Bill's maximum deduction in 2024 is $4,067 ([$4,500 − $2,433] + $2,000) since it is less than his net income of $22,000 ([$18,000 + $1,000 − $1,000] + $4,000). Bill claims his deduction of $4,067 on line 22900 of his income tax and benefit return.
Completing Form T777
Enter your claim on the Apprentice mechanic tools expenses line (9131) of Form T777, Statement of Employment Expenses.
Disposition of tools for an eligible apprentice mechanic
As a tradesperson (including an apprentice mechanic), you may decide to sell any or all of the eligible tools for which you claimed a deduction. If so, you must include, in your income in the year you sold the tool(s), the amount by which the proceeds of disposition of each tool is greater than the adjusted cost of the eligible tool sold. The proceeds of disposition of a tool is the amount of money you sold the tool for.
Adjust the original cost of each eligible tool you bought by using the following formula:
Adjusted cost of an eligible tool = D − [D × (E/A)]
where
D = the original cost of each eligible tool that you bought in 2024
E = the total of the tradesperson's tools deduction and apprentice mechanic tools deduction that you claimed in 2024Note de bas 1
A = the total cost of all eligible tools that you bought in 2024Footnote 2
- Footnote 1
-
In the case of the apprentice mechanic tools deduction, always assume there is no carryover amount (C = 0) when calculating E. See Deduction for tools for an eligible apprentice mechanic for the meaning of C.
- Footnote 2
-
If you made a claim for both the tradesperson's tools deduction and the apprentice mechanic tools deduction, use the value of A that was greater.
Complete a separate calculation for each eligible tool you bought in 2024.
- Example
Bill bought two eligible tools for $4,500. Tool A and Tool B cost $2,500 and $2,000, respectively. Bill must calculate the adjusted cost of these tools. He calculates the adjusted cost of Tool A as follows:
Adjusted cost of Tool A = D − [D x (E/A)]
where
D = $2,500
EFootnote 3 = $1,000 + $2,067 = $3,067
A = $4,500
- Footnote 3
-
The value of E is the total of the tradesperson's tools deduction of $1,000 and the apprentice mechanic tools deduction of $2,067, which is $4,067 (from Deduction for tools example) minus the carryover amount of $2,000 from 2023 ($4,067 − $2,000 = $2,067).
By applying this formula, the adjusted cost of Tool A is:
$2,500 − [$2,500 x ($3,067/$4,500)]
= $2,500 − $1,704
= $796
Similarly, the adjusted cost of Tool B is $637:
$2,000 − [$2,000 x ($3,067/$4,500)].
Assume that Bill sells Tool A in 2025 for $1,500. The proceeds of disposition of Tool A ($1,500) is greater than its adjusted cost ($796). As a result, he would have to include the amount of $704 ($1,500–$796) as income on line 13000 of his 2025 income tax and benefit return. If the proceeds of disposition had been less than the adjusted cost of the tool, Bill would not have been able to deduct the difference.
Completing Form T777
Enter your claim on the Tradesperson's tools expenses line (1770) of Form T777, Statement of Employment Expenses.
Completing your tax return
Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777, Statement of Employment Expenses.
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2025-01-21