Apprentice mechanic deduction for tools

Before they can gain employment, apprentice mechanics are often required to purchase a tool set that can cost thousands of dollars. To provide relief, the cost of new tools acquired by an eligible apprentice mechanic is deductible in calculating income, subject to certain limits.

The deductible amount is determined by a specified formula (which, in general, allows a deduction for the total cost of eligible tools less the greater of $1,661 or 5% of the individual’s apprenticeship income for the year).

The deduction is optional, and if the employee chooses not to deduct all or a portion of the deductible amount, it can be carried forward and deducted in a subsequent taxation year.

To be eligible for this deduction, the tools must be acquired while the apprentice is registered with a provincial or territorial body in a program leading to a designation as a mechanic licensed to repair automobiles, aircraft or any other self-propelled motorized vehicles. In addition, the mechanic’s employer must certify in prescribed form (Form T2200) that the tools were required as a condition of and for use in the apprentice’s employment.

Since this deduction has a much higher threshold than the deduction for tradespeople’s tools (see topic 103), where you qualify for both in the year, you may be able to claim under that provision where you cannot claim under this one.