Lines 41300 and 41400 – Labour-sponsored funds tax credit

A taxpayer who purchased an approved share of the capital stock of a prescribed labour-sponsored venture capital corporation (LSVCC) may be able to claim this tax credit.

You may be able to claim a credit if you became the first registered holder to acquire, or irrevocably subscribe to and pay for, an approved share of the LSVCC from January 1, 2019, to March 1, 2020.

If you became the first registered holder of an approved share from January 1, 2019, to March 1, 2019, you can claim any part of the credit for that share on your tax return for 2018, and the unused part on your tax return for 2019.

Notes

The LSVCC tax credit for solely federally registered LSVCC has been eliminated effective 2017.

If the first registered holder of the share is an RRSP for a spouse or common-law partner, the RRSP contributor or the annuitant (recipient) can claim this credit for that share.

If you bought shares after 2003 of a provincial or territorial registered LSVCC (that is not a federally registered LSVCC), you can only claim the federal-sponsored funds tax credit in respect of those shares if a provincial or territorial income tax credit is also available to be claimed for them.

RRSPs and the Labour-sponsored funds tax credit

See the Example – RRSPs and the Labour-sponsored funds tax credit.

Completing your tax return

Enter your net cost of your contributions to a labour-sponsored venture on line 41300 of your tax return. Net cost is the amount you paid for shares, minus any government assistance (other than federal provincial tax credits) on the shares.

Claim the amount of the credit on line 41400 of your tax return.

The LSVCC tax credit limit for 2019 will be:

  • 15% of the lesser of:
    • $5,000; and
    • the total of all amounts each of which is the net cost of the original acquisition of shares of a prescribed provincially-registered LSVCC (net provincial acquisition)

Your province or territory may offer a similar tax credit. Be sure to complete the tax and credit form for your province or territory of residence.

If you were a resident of Quebec on December 31, 2019, see the guide for your provincial tax return for Quebec.

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