Canadian journalism labour tax credit

Overview

The Canadian journalism labour tax credit is a refundable tax credit that is available to an organization that is a corporation, a trust, or a partnership.

The credit is calculated by applying a rate of 25% to the total qualifying labour expenditure incurred for a period in the tax year beginning on or after January 1, 2019, in respect of each eligible newsroom employee of a qualifying journalism organization (QJO), less any amount received from the Aid to Publishers component of the Canada Periodical Fund in the year. The rate increased to 35% for the period from January 1, 2023 to December 31, 2026. After that period, the rate will return to 25%. Transitional rules apply to prorate these changes where the tax year does not follow a calendar year. Note that other types of assistance can also impact the calculation of the qualifying labour expenditure; additional information can be found below in the Qualifying labour expenditure section.

Eligibility

To qualify for the Canadian journalism labour tax credit, an organization must be a QJO. To be a QJO, the organization must first be designated as a qualified Canadian journalism organization (QCJO). It must then meet both of the following additional criteria:

• it does not hold a licence, as defined in subsection 2(1) of the Broadcasting Act
• if it is a corporation with share capital, it meets specific ownership conditions of a Canadian newspaper as defined in the Income Tax Act

Eligible newsroom employee

An eligible newsroom employee of a QJO means an individual who:

• is employed by the QJO in the tax year
• at any time in the tax year, has been, or is reasonably expected to be, employed by the QJO for a minimum period of 40 consecutive weeks that includes that time
• works, on average, a minimum of 26 hours per week throughout the portion of the tax year in which the individual is employed by the QJO
• spends at least 75% of their time engaged in the production of original written news content, including researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content 
• meets any other conditions that may be prescribed (currently there are no other prescribed conditions)

Qualifying labour expenditure

A qualifying labour expenditure is generally the amount of salary or wages payable by a QJO to an eligible newsroom employee in respect of the portion of the tax year throughout which the organization is a QJO, less the amount of any assistance received or entitled to be received in the year regarding that employee. The credit does not apply to salaries or wages that are in respect of a period before January 1, 2019.

Generally, assistance includes amounts such as a refund, reimbursement, contribution, or allowance, whether as a grant, subsidy, forgivable loan, deduction from tax, or any other form of inducement. For example, Canada Emergency Wage Subsidy and Temporary Wage Subsidy earned on the same qualifying labour expenditure would generally be considered assistance. For details on how to calculate the labour tax credit with these types of assistance, go to Guidance on the income tax measures to support journalism.

While there is no maximum amount of qualifying labour expenditure that can be incurred by an organization in a given tax year, qualifying labour expenditures are subject to an annual cap. The annual cap for these expenditures increased from $55,000 to $85,000 per eligible newsroom employee as of January 1, 2023 (prorated for the number of days in the tax year the organization is a QJO). For example, an organization that ceases to meet the criteria to qualify as a QJO halfway through the tax year would be subject to half the annual cap, per eligible newsroom employee. Transitional rules apply to prorate the annual cap if the tax year began before 2023 and ended after 2022. 

How to claim the credit

Corporation

A corporation claiming the Canadian journalism labour tax credit must file a completed T2SCH58, Canadian Journalism Labour Tax Credit and enter the total amount of the credit on line 798 of the T2 Corporation Income Tax Return.

A member of a partnership that is a corporation must claim the amount of the credit allocated from the partnership on line 130 of the T2SCH58, Canadian Journalism Labour Tax Credit. This amount will be included in the total amount of the credit claimed by the corporation on line 798 of the T2 Corporation Income Tax Return.

Partnership

A partnership that allocates the Canadian journalism labour tax credit to the eligible members must file a completed T5013SCH58, Canadian Journalism Labour Tax Credit and enter the amounts allocated to each eligible member on line 220 of part 4.

The eligible members can claim their Canadian journalism labour tax credit in their respective tax returns (T1, T2, and T3). They can claim the credit on line 47555 of their T1, line 798 of the T2, or line 91 of their T3 return.

Further, with respect to a partnership that is a QJO, the credit will be effectively divided between the members of the partnership, other than members who are partnerships or specified members of the partnership, on its specified proportions.

Trust

A trust claiming the Canadian journalism labour tax credit must provide supporting documents and enter the total amount of the credit on line 91 of the T3 Trust Income Tax and Information Return. For more information on how to complete the return in go to publication T4013, T3 Trust Guide.

If the trust is not a QJO, but is a member of a partnership that meets the requirements to be a QJO, the Canadian journalism labour tax credit amount allocated to the trust by the partnership in T5013SCH58 can be claimed at line 91 of the T3 Trust Income Tax and Information Return.

For more information on the Canadian journalism labour tax credit criteria, go to Guidance on the income tax measures to support journalism.

If you have other questions about the Canadian journalism labour tax credit, go to Supporting Canadian journalism.