Form T2 Schedule 31 "Investment Tax Credit - Corporations (2019 and Later Tax Years)" - Canada

Download Form T2 Schedule 31 "Investment Tax Credit - Corporations (2019 and Later Tax Years)" - Canada

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Schedule 31

Code 1901

Investment Tax Credit – Corporations

Protected B

when completed

(2019 and later tax years)

General information

• Use this schedule:

– to calculate an investment tax credit (ITC) earned during the tax year

– to claim a deduction against Part I tax payable

– to claim a refund of credit earned during the current tax year

– to claim a carryforward of credit from previous tax years

– to transfer a credit following an amalgamation or the wind-up of a subsidiary, as described under subsections 87(1) and 88(1)

– to request a credit carryback to one or more previous years

– if you are subject to a recapture of ITC

– if you are claiming:

– the Ontario Research and Development Tax Credit

– the Ontario Innovation Tax Credit

• Unless otherwise stated, all legislative references are to the Income Tax Act and the Income Tax Regulations.

• The ITC is eligible for a three-year carryback (if not deductible in the year earned). It is also eligible for a twenty-year carryforward.

• Investments or expenditures, described in subsection 127(9) and Regulation Part XLVI, that currently earn an ITC are:

– qualified property and qualified resource property (Parts 4 to 7 of this schedule)

– qualified scientific research and experimental development (SR&ED) expenditures (Parts 8 to 17). File Form T661, Scientific Research

and Experimental Development (SR&ED) Expenditures Claim

– pre-production mining expenditures (Part 18)

– You can no longer claim the ITC for the pre-production mining expenditures. Only unused credits that have not expired can be carried forward

for up to 20 tax years following the tax year in which you made the investment.

– apprenticeship job creation expenditures (Parts 19 to 21)

– child care spaces expenditures (Parts 22 to 26)

– Expenditures related to child care spaces incurred after March 21, 2017 no longer qualify for the ITC. However, if you entered into a written

agreement before March 22, 2017, eligible expenditures incurred before 2020 remain eligible for the credit.

• File this schedule with the T2 Corporation Income Tax Return. If you need more space, attach additional schedules.

• For more information on ITCs, see "Investment Tax Credit" in Guide T4012, T2 Corporation – Income Tax Guide and read Information Circular IC78-4,

Investment Tax Credit Rates, and its related Special Release.

• For more information on SR&ED, see guide T4088, Scientific Research and Experimental Development (SR&ED) Expenditures Claim – Guide to

Form T661.

Detailed information

• For the purpose of this schedule, investment means the capital cost of the property (excluding amounts added by an election under section 21),

determined without reference to subsections 13(7.1) and 13(7.4), minus the amount of any government or non-government assistance that the corporation

has received, is entitled to receive, or can reasonably be expected to receive for that property at the time it files the income tax return for the year in which

the property was acquired.

• An ITC deducted in a tax year for a depreciable property, other than a depreciable property deductible under paragraph 37(1)(b), reduces both the capital

cost of that property and the undepreciated capital cost of that class in the next tax year. An ITC for SR&ED deducted or refunded in a tax year will reduce

the balance in the pool of deductible SR&ED expenditures and the adjusted cost base (ACB) of an interest in a partnership in the next tax year. An ITC from

pre-production mining expenditures deducted in a tax year reduces the balance in the pool of deductible cumulative Canadian exploration expenses in the

next tax year.

• Property acquired has to be available for use before a claim for an ITC can be made. See subsections 127(11.2) and 248(19) for more information.

• Expenditures for SR&ED qualifying for an ITC must be identified by the claimant on Form T661 and Schedule 31 no later than 12 months after the

claimant's income tax return is due for the tax year in which it incurred the expenditures.

• Expenditures for apprenticeship or child care space for an ITC must be identified by the claimant on Schedule 31 no later than 12 months after the

claimant's income tax return is due for the tax year in which it incurred the expenditures or capital costs.

• Partnership allocations – Subsection 127(8) provides for the allocation of the amount that may reasonably be considered to be a partner's share of

the ITCs of the partnership at the end of the fiscal period of the partnership. An allocation of ITCs is generally considered to be the partner's

reasonable share of the ITCs if it is made in the same proportion in which the partners have agreed to share any income or loss and if section 103 is

not applicable for the agreement to share any income or loss. Special rules apply to specified members of a partnership and limited partners.

For more information, see Guide T4068, Guide for the Partnership Information Return (T5013 Forms).

• For tax purposes, Canada includes the exclusive economic zone of Canada as defined in the Oceans Act (which generally consists of an area of the sea

that is within 200 nautical miles from the Canadian coastline), including the airspace, seabed and subsoil of that zone.

• For the purpose of this schedule, the expression Atlantic Canada includes the Gaspé Peninsula and the provinces of Newfoundland and Labrador, Prince

Edward Island, Nova Scotia, and New Brunswick, as well as their respective offshore regions (prescribed in Regulation 4609).

(Ce formulaire est disponible en français.)

T2 SCH 31 E (19)

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