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Before making a major financial decision you
should consult a qualified professional.
Eligible tools which were purchased in order to earn
employment income as a eligible apprentice mechanic may be deducted as employment expenses on
line 229 of the federal tax return. Employment expenses are first
entered on Canada Revenue Agency (CRA) Form
T777 Statement of Employment Expenses.
The Quebec calculation for the tool deduction for salaried
apprentice mechanics differs from the one described below. However,
Quebec has a fillable form, TP-75.2-V,
which you can complete, and it will calculate the appropriate deduction
If you are an eligible apprentice mechanic, you must first
calculate the tradesperson's tools deduction, if any, for which you
qualify. Then, calculate the employed apprentice mechanics tools deduction
to determine if this claim can also be made.
What is an eligible tool?
An eligible tool of a taxpayer is a tool, including related equipment, such
as a toolbox, that:
is acquired by the taxpayer for the use of the
taxpayer in employment as an eligible apprentice mechanic;
has not been used for any purpose before it is acquired by the taxpayer;
is, unless it can be used only for the purpose of measuring, locating or
calculating, not an electronic communication device or electronic data
What is an eligible apprentice mechanic?
An eligible apprentice mechanic is
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, boats, aircraft, or snowmobiles); and
employed as an apprentice mechanic
How is the apprentice mechanic tools deduction calculated?
The maximum deduction for eligible tools = (A-B) + C
A = the total cost of eligible tools purchased in the year
(same tools used in tradesperson tools deduction calculation),
plus, if you became employed as an apprentice mechanic for the first time during
the year, the cost of eligible tools purchased during the last 3 months of the
B = the lesser of:
the total cost of eligible tools tools as determined in
the greater of:
$500 + the Canada employment amount claimed on line
363 of Schedule 1 (max $1,161 for 2016, $1,146 for 2015); and
your employment income as an eligible
Thus, B = lesser of $3,000 and $1,772.50 = $1,772.50
Maximum deduction = $3,000 - $1,772.50 + 0 = $1,227.50.
The tool costs will include any GST/HST or
provincial sales taxes incurred. You may be eligible for a refund of the
GST/HST included in the costs. See Employee
and Partner GST/HST rebate on the GST/HST page.
When the tools deduction is claimed, keep the information
that will allow you to calculate the adjusted cost of each tool. The
adjusted cost is the original cost reduced by any tool deductions claimed.
If you subsequently sell a tool, it is necessary to include any gain from the
sale in income.