Line 41200 – Investment tax credit

Note: Line 41200 was line 412 before tax year 2019, and line 45400 was line 454 before tax year 2019.

You may be eligible to claim an investment tax credit (ITC) if any of the following applies:

• You bought certain new buildings, machinery, or equipment and they were used in certain areas of Canada in qualifying activities such as farming, fishing, logging, manufacturing, or processing (see Atlantic investment tax credit)
• You have done work that qualifies for scientific research and experimental development (SR&ED) tax incentives (see Scientific research and experimental development tax incentive)
• You employ an eligible apprentice you want to claim an Apprenticeship Job Creation Tax Credit for 
• You have unclaimed credits earned in the last 10 years
• You received a T3 slip showing an amount in box 41
• You received a T5013 slip showing an amount in box 186 or box 194
• You received a T101 slip showing an amount in box 128
• You have a partnership financial statement that allocates to you an amount qualifying for the ITC
• You have an investment in a mining operation that allocates certain exploration expenditures to you
• You created licensed child care spaces for the children of your employees

Certain renounced Canadian exploration expenses qualify for the ITC. You can claim this credit if you received Form T101, Statement of Resource Expenses, or a T5013 slip with an amount in box 194. For more information, see Form T2038(IND), Investment Tax Credit (Individuals).

Completing your tax return

For the current year, complete the appropriate parts of Form T2038(IND) and enter the amount of your credit on line 41200 of the return.

You can carry back the credit you earn for up to three years and use it to reduce your federal tax by completing Part E of Form T2038(IND) and filing it with your paper return.

You can carry forward credits earned in tax years ending after 1997 for up to 20 years by completing Part F of Form T2038(IND) and filing it with your paper return.

You may be able to claim a refund of your unused ITCs. For more information, see line 45400.

Time limits

You must file your Form T2038(IND) no later than 12 months after your tax return's due date for the tax year the expenditure arises.

If you did not file your Form T2038(IND) with your return for the year the ITC was earned and before the deadline stated above, you have to do one of the following:

• Complete Form T1-ADJ, T1 Adjustment Request
• Sign a letter showing your name, address, telephone number, and social insurance number

Send Form T1-ADJ or your signed letter with a completed Form T2038(IND) to the Enquiries and Adjustment Section of your local tax centre to validate any future claim for that credit.

You can also ask for an adjustment electronically using My Account.

Forms and publications

• Income Tax Package – Guide, return, and schedules
  
• Form T1-ADJ, T1 Adjustment Request
• Form T101, Statement of Resource Expenses
• Form T2038(IND), Investment Tax Credit (Individuals)
• Information Circular IC78-4R3, Investment Tax Credit Rates
• Information Circulat IC78-4R3SR Special Release – Investment Tax Credit Rates
• Slip T3, Statement of Trust Income Allocations and Designations