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.

There are no lines on the return for the recapture of investment tax credit and the federal logging tax credit. If these amounts apply, use them to calculate your net federal tax on your return.

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.

Write "recapture of investment tax credit" and enter the amount below line 40600 on your return. Add it to the amount on line 40600 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 2 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

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

Write "federal logging tax credit" and enter the allowable amount below line 40600 of your return. Subtract it from the total of the amount on line 40600 of your return and the amount of any applicable recapture of investment tax credits.

Completing your tax return

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

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