Forms & Schedules

T2038 Tax Form: Investment Tax Credit for Individuals in Canada

Who should use the T2038 tax form?

The Investment Tax Credit for Individuals form is designed for people who have earned an investment tax credit (ITC) during the current tax year or who are carrying forward an ITC from a previous tax year.

What is the definition of an Investment Tax Credit (ITC)?

You have earned an ITC if you acquired certain types of property, had certain types of expenses like scientific research and experimental development (SR&ED) expenditures, paid a salary and wages to apprentices, or created child care spaces in a licensed child care facility that your employees can use.

How is an ITC calculated?

It is based on a percentage of the investment cost. That cost includes the cost of the property you bought and the expenses you made. If you have received a reimbursement, inducement or assistance related to the property or expenditure, you have to deduct it from the investment cost.

What can I use investment tax credits for?

You can use an ITC that you earn in the current tax year to reduce your federal tax for a previous year (maximum of three years), for the current tax year or for a future year (up to 20 years).

Are there any time limits?

You have to submit this form within 12 months after the due date of your return for the tax year in which you acquired the property or had the expense.

To see if investment tax credits apply to you and for a detailed investment tax credit definition, please check the CRA website.

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