Tradesperson's Tools Deduction

The information below is based on legislative proposals and may be subject to change.

1. What is the new tradesperson's tools deduction?
2. Who qualifies?
3. What qualifies as an eligible tool?
4. How do I claim the deduction?
5. As an apprentice mechanic, can I claim both the apprentice mechanic tools deduction and the tradesperson's tools deduction?
6. When does this tax measure take effect?
7. Where can I get more information about the tradesperson's tools deduction?

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1. What is the new tradesperson's tools deduction?
The new tradesperson's tools deduction provides employed tradespersons with an annual deduction of up to $500 to help cover the cost of new tools necessary to their trade. The deduction applies to the total cost of eligible tools if the following conditions are met:

• the total cost exceeds $1,000;
• the tools were bought after May 1, 2006;
• the purchase was made by an employed tradesperson.

2. Who qualifies?
Individuals who are employed tradespersons.

3. What qualifies as an eligible tool?
An eligible tool is a tool (including associated equipment such as a toolbox) that was bought solely for use in the tradesperson's job and that was not used for any purpose before it was bought. Electronic communication devices (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) are not eligible.

4. How do I claim the deduction?
You will be able to claim the new tradesperson's tools deduction as part of your total employment expenses deduction on line 229 of your income tax return.

To support your claim, you will also need to attach a completed Form T777, Statement of Employment Expenses, to your income tax return. Your employer will have to complete and sign Form T2200, Declaration of Conditions of Employment, to certify that you are required to provide these tools as a condition of, and for use in, your employment.

5. As an apprentice mechanic, can I claim both the apprentice mechanic tools deduction and the tradesperson's tools deduction?
Yes. As an eligible apprentice mechanic, you must first calculate the tradesperson's expense deduction, if any, that you qualify for. This deduction is then taken into consideration in your calculation of the apprentice mechanic's tools deduction.

6. When does this tax measure take effect?
This tax measure applies to eligible tools you have purchased after May 1, 2006.

7. Where can I get more information about the tradesperson's tools deduction?
Additional information will be available in the 2006 version of Guide T4044, Employment Expenses.