You may be eligible to claim an investment tax credit (ITC) if any of the following applies:
- you employ an eligible apprentice for which you want to claim an Apprenticeship Job Creation Tax Credit (AJCTC);
- you bought certain new buildings, machinery, or equipment and they were used in certain areas of Canada in qualifying activities such as farming, fishing, logging, manufacturing, or processing;
- you have unclaimed credits earned in the last 10 years;
- you have received a T3 slip, showing an amount in box 41;
- you have received a 2006 version of a T5013 slip, with an amount showing in box 107, or a 2004 version of a T5013 slip, with an amount showing in boxes 38 or 138;
- you have received a T5013A slip, with an amount showing in boxes 107 or 128;
- you have received a T101 slip, with an amount showing in box 128;
- you have a partnership financial statement that allocates to you an amount that qualifies for this credit; or
- you have an investment in a mining operation that allocates certain exploration expenditures to you.
For renounced Canadian exploration expenses, you may be able to claim a credit if you incurred the expenses before January 1, 2006, for most cases, or after May 1, 2006 and before April 1, 2007, in certain cases. See Form T2038(IND), Investment Tax Credit (Individuals) for more information.
How to claim
For the current year, complete part A of Form T2038(IND) and enter the amount of your credit on line 412 of Schedule 1 of your income tax return.
You can carry back the credit you earn for up to three years and use it to reduce your federal tax. To do this, complete Part B of Form T2038(IND).
You can carry forward for up to 10 years a credit you earned before 2006 if it was not refunded to you, or if you haven't used it in the current year or the three previous years. You can carry forward for up to 20 years a credit you earned in 2006 that was not refunded to you, or that you did not use to reduce your federal tax in 2006 or in the 3 previous years. Submit Form T2038(IND) with your tax return.
Please note that you will lose any unused credits after 10 years have passed from the time they were earned. However, credits you have earned after 2005 will expire in 20 years.
You may be able to claim a refund of your unused ITCs. For more information, see Line 454 - Refund of investment tax credit.
Time limits
You must send your Form T2038(IND) no later than 12 months after your income tax return's due date, for the tax year in which the expenditure arises.
If you did not file your Form T2038(IND) with your tax return for the year it was earned, you should submit, before the deadline stated above, a Form T1-ADJ, T1 Adjustment Request, or a signed letter indicating your name, address, daytime telephone number, and social insurance number, with the completed Form T2038(IND) to the Enquiries and Adjustment Section of your local tax centre to validate any future claim for that credit.
Also, you can ask for an adjustment electronically. To do this, use My Account.
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