Line 420 - Net federal tax

Your net federal tax is calculated on your Schedule 1, Federal Tax and entered on page 4 of your tax return. It is your federal tax payable on your taxable income minus your federal non-refundable tax credits and various other federal tax credits which may be applicable to you.

There are no lines on the return for the recapture of investment tax credit and the federal logging tax credit. If these amounts apply, use them to calculate your net federal tax on Schedule 1.

Completing your Schedule 1

Recapture of investment tax credit
If you have to repay all or part of an investment tax credit you received previously for scientific research and experimental development, or for child care spaces, calculate on Form T2038(IND), Investment Tax Credit (Individuals), the amount you have to repay.

Write "recapture of investment tax credit" and enter the amount below line 54 on Schedule 1 or line 57 for residents of Quebec. Add it to the amount on line 54 or line 57 for residents of Quebec.

Federal logging tax credit
If you paid a logging tax to a province for logging operations you performed in the province, you may be able to claim a logging tax credit. To calculate your credit, use the lesser of the following two amounts for each province in which you had a logging operation:

• 66.6667% of the logging tax paid for the year to the province; and
• 6.6667% of your net logging income for the year in the province.

Your allowable credit is the total of the credits for the year for all provinces, up to 6.6667% of your taxable income (line 260), not including any amounts on lines 208, 214, 215, 219, and 220.

Write "federal logging tax credit" and enter the allowable amount below line 54 on Schedule 1, or line 57 for residents of Quebec. Subtract it from the total of the amount on line 54 or line 57 and the amount of any applicable recapture of investment tax credits.

Completing your tax return

Claim on line 420 the amount of net federal tax you calculated on your Schedule 1.

Forms and publications

• General income tax and benefit package - Guide, return and schedules
• Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim
• Form T2038(IND), Investment Tax Credit (Individuals)

Date modified:

2017-01-04