Manitoba Budget: New Tax Credit for Teachers

Evelyn Jacks

The Manitoba Budget was released on April 7 and contains a highlight for teachers in 2021: a 15% refundable tax credit for eligible educators who spend their own money (up to $1,000) on supplies for students.  This claim mirrors the federal credit, which is claimed on Lines 46800 and 46900.  Who is an eligible educator?  Here are the details.

Eligible educators.    This includes teachers at elementary or secondary schools in Canada.  It can also include early childhood educators at regulated childcare facilities.  These educators must hold a valid provincial teaching certificate, license, permit, diploma or certificate or diploma in early childhood education. 

Eligible supplies expenses.  This includes supplies purchased in 2021 if all of the following conditions are met:

• They were purchased for teaching or to facilitate learning for students
• They were directly consumed or used in an elementary or secondary school or in a regulated childcare facility in the performance of your employment
• There was no reimbursement, allowance, or any other form of assistance for the expense (unless the amount is included in income from any tax year and is not deductible in the calculation of taxable income)
• The eligible teaching supplies expense was not deducted from any person’s income for any year or included in calculating a deduction from any person’s tax payable for any year

Teaching supplies are further described by the CRA as consumable supplies and prescribed durable goods. Prescribed durable goods include:

• books, games, and puzzles
• containers (such as plastic boxes or banker boxes)
• educational support software

Clearly, the rules did not anticipate the realities of the pandemic and make no mention of the ability to claim PPE or other pandemic supplies, although it could be interpreted that these were required for teaching and were directly used up in the settings.  In addition, with educational support software falling into the category of prescribed durable goods, unreimbursed expenses for zooming with students will likely fall into this category. 

Audit proofing - CRA may ask for a written certificate from the employer or a delegated official of the employer (such as the principal of the school or the manager of the childcare facility) attesting to the eligibility of the expenses for the year. 

It would be a good idea to have this on hand at the time the 2021 tax return is filed; therefore, tax specialists may wish to suggest the documentation be gathered in advance of making an un-reimbursable expenditure.

Additional educational resources: These issues will be discussed in more detail at the upcoming CE Summits in May and September. Please register early to receive online materials and food for the day.

As the Pandemic exasperates an already complex tax regime that will continue to affect  tax filing continue in 2021 and beyond, now is a great time to start a new career or embellish on existing services by enrolling to get new credentials to provide an essential service and help Canadians as a DFA-Tax Services Specialist™.