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Tools Deduction for Employed Apprentice Mechanics
Income Tax Act s. 8(1)(r)
Eligible tools which were purchased in order to earn employment income as a eligible apprentice mechanic may be deducted as employment expenses on line 22900 (line 229 prior to 2019) 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 amount.
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 certified, using form T2200, Declaration of Conditions of Employment, by the taxpayer's employer to be required to be provided by the taxpayer as a condition of, and for use in, the taxpayer's employment as a tradesperson; and |
| is, unless it can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment. |
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?
Our Employee Tools Deduction Calculator will do the calculation for you.
The maximum deduction for eligible tools = (A-B) + C
where
A = the total cost of eligible tools purchased in the taxation 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 preceding year
B = the lesser of:
| the total cost of eligible tools tools as determined in A; and | ||||||||||||
| the greater of:
|
C = the amount, if any, of the maximum deduction for eligible tools calculated for the prior year but not claimed in the prior year.
The apprentice mechanic tool deduction cannot exceed the net income for all sources. This means it cannot create a non-capital loss, and any unused portion can be carried forward.
Example:
| Tool purchases in the year = $3,000 (A) |
| Tradesperson tools deduction claimed = $1,000 |
| Employment income as eligible apprentice mechanic = $35,000 |
| Canada employment amount claimed = $1,368 (max for 2023) |
| Apprenticeship Completion Grant received = $1,500 |
| Apprenticeship Incentive Grant overpayment repaid = $550 |
| There is no amount carried forward from the prior year (C=0) |
Maximum deduction = (A-B) +C
A = $3,000
B= lesser of $3,000 and
the greater of
| $1,000 + $1,368 = $2,368 and |
| 5% of ($35,000 + $1,500 - $550 - $1,000) = $1,748 |
Thus, B = lesser of $3,000 and $2,368 = $2,368
Maximum deduction = $3,000 - $2,368 + 0 = $632.
If net income before the apprentice tools deduction is less than the maximum deduction, then any unused tools deduction would be carried forward to the next year.
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.
Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.
TaxTips.ca Resources
Labour Mobility Deduction (LMD) For Employed Tradespeople
Canada Revenue Agency (CRA) Resources
Line 22900 Other Employment Expenses
T4044 Employment Expenses - See Employed Apprentice Mechanics
Form T777 Statement of Employment Expenses
Revised: September 20, 2024