Newfoundland and Labrador direct equity tax credit

What’s in this article?

 

What is this?

​The Newfoundland and Labrador Direct Equity Tax Credit program is calculated on form T1272 : Newfoundland and Labrador Direct Equity Tax Credit. The credit provides a 20% or 35% non-refundable tax credit for investments in small businesses engaged in qualifying activities in Newfoundland.

  • The 20% rate applies to activities undertaken within the North East Avalon
  • The 35% rate applies to activities undertaken outside the North East Avalon

Activities that qualify for this tax credit include:

  • Technology
  • Research and development
  • Aquaculture
  • Forestry and agrifoods
  • Manufacturing and processing
  • Export/import replacement businesses
  • Tourism
  • Cultural industries

If you invested in eligible shares during the tax year, or in the first 60 days of the following year, you will receive an NL DETC-1 receipt (certificate) indicating the amount that you are eligible to claim. The maximum credit you can claim is $50,000 per year. If you do not need to use the entire amount in a single year, the unused credit amount can be carried forward seven years or back three years.

 

Am I eligible?

Canada Revenue Agency (CRA) says…

You can claim this credit for investments in eligible shares you acquired in 2015 (that you did not claim on your 2014 return) or in the first 60 days of 2016.

To claim the credit, complete Form T1272, Newfoundland and Labrador Direct Equity Tax Credit.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

Important: Before you begin, ensure that you told us that you lived in NEWFOUNDLAND AND LABRADOR on December 31st of the 2015 tax year, in H&R Block’s tax software. To do this:

  1. Click the HOME tab.
  2. Click the ABOUT YOU icon, and click the Your residence link. You will find yourself here:

Once you have confirmed your residence location, you can complete form T1272 by following these steps:

  1. Click the PREPARE tab.
  2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:
  3. Click the checkbox labelled I had investments.
  4. Scroll to the bottom of the page and click Continue.
  5. Click the RRSPS AND INVESTMENTS icon.  You will find yourself here:
  6. Under the RESOURCE INCOME AND CREDITS heading, click the checkbox labelled Newfoundland and Labrador direct equity tax credit (T1272).
  7. Scroll to the bottom of the page and click Continue.

When you arrive at the page for form T1272, enter your information into the tax software.

Note: In order for this credit to be displayed in H&R Block’s tax software, you must have indicated that you are at least 18 years of age.

 

Where can I learn more?