Teacher and Early Childhood Educator School Supply Tax Credit

Budget 2016 proposes to introduce a teacher and early childhood educator school supply tax credit for 2016 and subsequent taxation years. This measure will allow an employee who is an eligible educator to claim a 15% refundable tax credit based on an amount of up to $1,000 of purchases of eligible teaching supplies by the employee in a taxation year.

This measure has received Royal Assent. Eligible educators, regardless of their income level, who purchase educational materials, will qualify for a refund of up to $150 each year.

WHO IS AN ELIGIBLE TEACHER OR EARLY CHILDHOOD EDUCATOR?

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:

• An eligible teacher holds a teacher’s certificate that is valid in the province or territory in which they are employed.
• An eligible early childhood educator holds a certificate or diploma in early childhood education that is recognized in the province or territory in which the individual is employed.

WHAT IS AN ELIGIBLE SUPPLIES EXPENSE?

An eligible supplies expense is an amount paid in the year by an eligible teacher or early childhood educator for teaching supplies that are:

• purchased by the teacher or educator for teaching or facilitating learning, and directly consumed or used in an elementary or secondary school or in a regulated child care facility in the performance of the teacher or educator’s duties of employment;
• not reimbursable and not subject to an allowance or other form of assistance (unless the reimbursement, allowance or assistance is included in the income of the teacher or educator and not deductible); and
• not deducted or used in calculating a deduction from any person’s income for any taxation year.

WHAT KINDS OF TEACHING SUPPLIES ARE ELIGIBLE?

To be an eligible supplies expense, the teaching supplies must be purchased in the taxation year, by an eligible teacher or early childhood educator to use in a school or in a regulated child care facility for the purpose of teaching or helping students learn.

Teaching supplies include consumable goods. Some examples are:

• Construction paper for activities, flashcards for activity centres;
• Items for science experiments, such as seeds, potting soil, vinegar, baking soda and stir sticks;
• Art supplies such as paper, glue and paint; and
• Various stationary items, such as pens, pencils, posters and charts.

And the only durable goods that qualify as teaching supplies are listed below:

• games and puzzles;
• books for the classroom;
• containers such as plastic boxes or banker boxes; and
• educational support software.

IS COMPUTER, TABLET OR RUG (FOR KIDS TO SIT ON) AN ELIGIBLE EXPENSE?

Computers, tablets and rugs are not eligible expenses because they are durable goods (which can be used repeatedly or continuously for a relatively long time) that are not included in the above list of durable goods that qualify as teaching supplies.

THE YEAR OF WHICH THE TAX CREDIT CAN BE CLAIMED MUST BE THE YEAR IN WHICH THE SUPPLIES WERE PURCHASED

The expense is included in calculating the tax credit for the taxation year in which the supplies were purchased. E.g. if supplies are purchased in December 2016, but used in the school or facility in the following calendar year, 2017,  it should be deducted in 2016 as the tax credit is calculated based on when the supplies were purchased.

EXPENSE THAT IS NOT PURCHASED IN THE YEAR IS NOT ELIGIBLE

A teaching supply has to be purchased in the same year that it is included in calculating the tax credit, and must have been purchased for the purpose of teaching or facilitating students’ learning.

If  you brought some used books, games and puzzles from home for the children to use in the classroom. You can’t claim either a part of the original cost or current value.

DOCUMENTS  TO SUPPORT THE CLAIM

If you claim this tax credit, the CRA may ask you to provide a certification from your employer (or a delegated official of the employer) attesting to the eligible supplies expense. You should request the certification from your employer in a timely manner and keep it in your files, along with your receipts, in case the CRA requests it.

WHAT WOULD HAPPEN IF I CAN’T PROVIDE THE EVIDENCE WHEN THE CRA REQUESTS IT

If the CRA requests that you provide certification from your employer and you do not provide it, even if you can provide receipts for the purchases, your claim for the tax credit will be denied.

Employer Guide for the Teacher and Early Childhood Educator School Supply Tax Credit

Please contact our office if you need a copy of the employer guide.