Tradesperson’s Tools Tax Deduction
By Mauricio Dreher | Published 20/02/2019
Since we are about to start the Tax Season, it is time to talk about the Tradesperson’s Tools Deduction.
Employed tradespersons (including apprentice mechanics) may be able to deduct the cost of eligible tools you bought in 2018 to earn employment income as a tradesperson and as an eligible apprentice mechanic. This cost includes any GST and provincial sales tax (PST), or HST you paid.
An eligible tool is a tool (including associated equipment such as a toolbox) that:
- you bought to use in your job as a tradesperson and was not used for any purpose before you bought it;
- your employer certified as being necessary for you to provide as a condition of, and for use in, your job as a tradesperson; and
- 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 and sign Form T2200, Declaration of Conditions of Employment. Have your employer complete question 11 of Part B of the form to certify that the tools being claimed were bought and provided by you as a condition of your employment as a tradesperson. Attach to Form T2200 a list of the tools you are claiming, as well as the related receipts. You do not have to include Form T2200, your receipts, or your list of tools with your return, but you should keep them in case CRA ask to see them.
Employed Apprentice Mechanics
You are an eligible apprentice mechanic if 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); and
- 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 that deduction if you bought eligible tools for your job in 2018. You can then complete the calculation called Deduction for tools for an eligible apprentice mechanic to determine if you can also make this claim in 2018.
This is another example of Tax Savings opportunities you have from several existing ones that you might not even know about them. Talk to your CFP – Certified Financial Planner; he or she will be happy to assist you to have the best tax advantage possible.