Line 42000 – Net federal tax

Note: Line 42000 was line 420 before tax year 2019.

Your net federal tax is calculated on your return. It is your federal tax payable on your taxable income minus your federal non-refundable tax credits and various other federal tax credits which may be applicable to you.

Recapture of investment tax credit

If you have to repay all or part of an investment tax credit you received previously for scientific research and experimental development, or for child care spaces, calculate on Form T2038(IND), Investment Tax Credit (Individuals), the amount you have to repay, and enter this amount on the Recapture of investment tax credit line of your return.

Federal logging tax credit

If you paid a logging tax to a province for logging operations you performed in the province, you may be able to claim a logging tax credit. To calculate your credit, use the lesser of the following two amounts for each province in which you had a logging operation:

• 66.6667% of the logging tax paid for the year to the province
• 6.6667% of your net logging income for the year in the province

Enter the total of the credits for the year for all provinces, up to 6.6667% of your taxable income from line 26000 of your return, not including any amounts on lines 20800, 21400, 21500, 21900, and 22000 of your return.

Completing your tax return

Enter on line 42000 of your return the amount of net federal tax you calculated on your return.

Forms and publications

• Income Tax Package – Guide, return, and schedules
• Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim
• Form T2038(IND), Investment Tax Credit (Individuals)