Line 41200 – Investment tax credit (ITC)

Description

The Atlantic investment tax credit is based on a specified percentage of 10% available for certain investments in new buildings, and new machinery and equipment used in the Atlantic Canada and Atlantic Region.

Eligible investments

As of March 29, 2012, this credit supports investments in qualified property for use in the following sectors:

• farming
• fishing
• logging
• manufacturing and processing
• storing grain
• harvesting peat
• prescribed new energy generation and conservation property
• the production or processing of electrical energy or steam in certain areas

Filling in your tax return

For the current year, fill in the parts A to D of Form T2038(IND) and enter the amount of your credit on line 41200 of the return.

You can carry back the credit you earn for up to three years and use it to reduce your federal tax by filling in Part E of Form T2038(IND) and filing it with your paper return.

You can carry forward credits earned in tax years ending after 1997 for up to 20 years by filling in Part F of Form T2038(IND) and filing it with your paper return.

You may be able to claim a refund of your unused ITCs. For more information, go to Line 45400 – Refund of investment tax credit.

Time limits

You have to file your Form T2038(IND) no later than 12 months after your tax return's due date for the tax year the expenditure arises.

If you did not file your Form T2038(IND) with your return for the year the ITC was earned and before the deadline stated above, you have to do one of the following:

• Fill in Form T1-ADJ, T1 Adjustment Request
• Sign a letter showing your name, address, telephone number, and social insurance number

Send Form T1-ADJ or your signed letter with a completed Form T2038(IND) to the Enquiries and Adjustment Division of your local tax centre to validate any future claim for that credit.

You can also ask for an adjustment electronically using My Account.