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 that may be applicable to you.

Recapture of investment tax credit

If you have to repay all or part of an investment tax credit that you previously received for scientific research and experimental development or child care spaces, complete Form T2038(IND), Investment Tax Credit (Individuals), to calculate the amount you have to repay. Enter the result 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 that 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 you had a logging operation in:

• 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 that you calculated.

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)