A forklift licence is a type of operator's licence that is issued to a person who operates a forklift truck. The operator's license is usually required by law in some countries and jurisdictions.
The cost of the licence varies from country to country and can range from $50 to $300 or more. The cost of the licence depends on how many hours of training you need and how much the government charges for it in your country.
It also depends on what type of training you need - if you need only advanced training, then expect the cost will be more expensive than if you require basic training.
Since it isn’t cheap maintaining this credential, you might be asking, is a forklift licence tax deductible? The short answer is YES. This is one of the many tax deductions that are available for those who work with this equipment as part of their job description.
If you’re presently working and the employer asked you to take training for you to be able to operate a forklift, the expenses you’ve shouldered are deductible from tax since operating the equipment is part of fulfilling your responsibilities.
However, if the opposite circumstance happens such as when you’re not presently employed or you shift to another job and you need a forklift licence to obtain work, then the forklift license wouldn’t be deductible.
We would like to remind you that rules and conditions vary from country to country. The above information may apply or not depending on the location you are in.
To help you guide through this, we made a research on every country about this topic. Please read below…
How to Check If You’re Eligible for Tax Deduction
If you’re in Australia:
The latest 2021 individual tax return lists the deductions you can be qualified for. Please find the ATO website which you can read here. The categories you can be eligible for is the D4 and D5.
D4: Work-related self-education expenses 2021 – in order to be qualified for this category, you must meet the following criteria:
- The course maintained or improved a skill or specific knowledge required for your current work activities - (e.g: if your LO or LF licence has expired and renewal has been done; if you have an LO licence and the employer ask you to obtain an LF licence or vice versa)
- You could show that the course was leading to, or was likely to lead to, increased income from your current work activities - (e,g: if you’re a factory worker and your superior asked you to operate a reach truck (LO licence) to increase pay)
- Other circumstances existed that established a direct connection between the course and your current work activities – (e.g: completion of other health and safety training, first training, or earning of certificates that are related to your current work responsibilities)
D5: Other work-related expenses 2021 – this category lists down the work-related expenses that are eligible for a tax deduction, you can fall under the “professional seminars, courses, conferences and workshops” since a forklift licence involved taking professional training in a Registered Training Organisation (RTO) and application of licence (LF or LO, the two categories of forklift licence) in WorkSafe.
If you’re in the UK
If you are the one who paid for your forklift training:
- You will be eligible for tax relief if you need the training to do your job – if it is ‘wholly, exclusively and necessarily incurred. (e.g: taking refresher training; taking conversion training)
- On the other hand, tax relief will not be given if the training is primarily intended to get a new job (e.g: novice forklift training which is a needed to get a new job as an operator)
If the cost incurred in taking the forklift training is shouldered by the employer:
- In this circumstance, tax relief is given to the employer as long as the training provided has a direct impact on operators to perform the job (e.g: taking of conversion and refresher training)
Operators can reimburse their cost of training from the employer; the employer can then deduct the expenses incurred from tax.
If you’re in the US
By rule, it is the employer who must pay for the provision of forklift training. Since this type of training improves the skills of operators, it is, therefore, qualified to be tax-deductible. However, if the training would enable the worker to get a new job and doesn’t pertain to the current job, the costs incurred are not deductible.
To know more about the other expenses that are tax-deductible, please read Topic No. 513 Work-Related Education Expenses on the IRS website.
The IRS allows you to deduct the cost of certain expenses if they are related to your job. This is done through a tax deduction. If you have spent money on items such as education, travel, or tools that are related to your job, then you can use these items for deductions.
The following are some of the most common types of expenses that people can deduct from their taxes:
- Education: Tuition and fees, books, supplies and equipment, required uniforms and protective clothing
- Travel: hotels, meals, and entertainment
- Tools: cellphones or other communications devices
If you’re in Canada
You can deduct the cost of forklift training as an employment expense as long as it has a direct relation to your job as a forklift operator. To qualify for a tax deduction, the forklift training has to maintain, or update your current skills that relate to your job as an operator. (e.g: taking refresher training to become updated on the new standards; taking training on the type of forklift you’re not familiar with)
If the costs incurred in taking forklift training do not qualify in the first option mentioned above, you can apply that as a tuition amount but certain conditions have to be met in order to qualify. To know more about these, please read Pamphlet P105, Students and Income Tax.
To Make a Conclusion
Forklift Training is considered a work-related expense because it is necessary in order for workers to perform their jobs. This means that they can claim any tax deductions on their income taxes.
This relief allows you to deduct the cost of the training from your business expenses, which can be especially helpful for small businesses.
If you are interested in availing of this benefit, reach out to your respective tax agency to know about the process and requirements.
