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 new buildings, machinery, or equipment that is qualified property and used in certain areas of Canada in qualifying activities such as farming, fishing, logging, manufacturing, or processing (see Atlantic investment tax credit)
• You have incurred qualified expenditures for scientific research and experimental development (SR&ED) (see Scientific Research and Experimental Development tax incentives)
• You employ an eligible apprentice and incurred apprenticeship expenditures
• You have unclaimed ITCs of a previous year
• You received a T3 slip showing an amount in box 40
• You received a T5013 slip showing an amount in box 186, 187 or 189
• You have received a partnership financial statement that allocates ITCs to you
• You have an investment in a flow-through mining operation that renounces certain exploration expenditures to you (you can claim this credit if you have reported an amount in Part IV of Form T1229, Statement of Resource Expenses and Depletion Allowance)
• You have unused child care ITCs from the creation, in a previous year, of licensed child care spaces for the children of your employees (any unused amounts for child care spaces from previous years can be carried forward 20 years after the expenses were incurred)

For more information, see Form T2038(IND), Investment Tax Credit (Individuals).

Filling in your tax return

For the current year, fill in the parts A to D 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 filling in 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 filling in 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, go to Line 45400 – Refund of investment tax credit.

Time limits

You have to 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:

• Fill in 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 Division 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

• Get a T1 income tax package
• Form T1-ADJ, T1 Adjustment Request
• Form T101, Statement of Resource Expenses
• Form T2038(IND), Investment Tax Credit (Individuals)
• Information Circular IC78-4, Investment Tax Credit Rates, and its Special Release
• Slip T3, Statement of Trust Income Allocations and Designations