Certain Québec refundable credits are not taxable for Québec tax calculation purposes. Consequently, while these credits are taken into account in the year they were received or in the year that the corporation is entitled to those credits, they are not included in the income calculation for income tax purposes. These credits include:
- credit for the income tax paid by an environmental trust; and
- credit for taxi owners.
Lines 140a and 140b of Form CO-17.A.1 (Jump Code: Q1) allow you to deduct these credits (as reconciling items) when determining the net income for Québec tax purposes. The Q1 L140A, Non-taxable tax credits (Jump Code: L140A) workchart facilitates the carry-over of the non-taxable tax credits to lines 140a and 140b. The tax credit to be deducted from the corporation’s income must be entered on the appropriate line of this chart. The amount entered will then be transferred to Form CO-17.A.1 with the code and the description corresponding to the credit.
When the corporation has more than two non-taxable tax credits (i.e. when the cells on lines 140a and 140b are completed), the workchart will print subsequent to Form CO-17.A.1 to provide the complete list of these credits.
A workchart was also added for taxable tax credits that must be entered on lines 70a to 70j in order to be included in the net income calculation. It is Form Q1 L70A, Taxable tax credits (Jump Code: L70A). This workchart facilitates the carry-over of the taxable tax credits to lines 70a to 70j and works in the same manner as the Q1 L140A workchart.
The Québec tax credit amounts for which the column B check box is selected in the Inducement Calculation Workchart (Jump Code: INDUCEMENT) are updated to the appropriate lines in Form Q1 L70A only if the Specialized Information (SI) module is installed. If this module is not installed, you will have to manually enter the tax credit amounts in Form Q1 L70A.
Scientific Research and Experimental Development Expenditures (R&D)
Lines 18a to 18d of Form CO-17.A.1 are used to itemize the deducted R&D expenditures according to the financial statements.
Since it is necessary to allocate the amounts of federal expenditures (amounts on lines 118 and 212 of Schedule 1), a field displaying the balance to allocate is available, on-screen only, above line 18a. When the amount of federal expenditures is totally allocated or if there is to be no amount to allocate, “0” will be displayed in this field.
Line 127, Additional deduction for trucks and tractors designed for hauling freight
This line refers to the additional deduction of 85% of the amount deducted in calculating the income in accordance with a 60% CCA rate with regard to a truck or tractor designed to haul freight that is fuelled by liquefied natural gas (LNG).
Line 150f
Line 150f is used for posting the deduction as per paragraph 20(1)(e) of the ITA entered on line 395 of Schedule 1, Net Income (Loss) for Income Tax Purposes (Jump Code: Q1).
When a federal amount is manually entered on line 395 of Schedule 1 and Form Deduction as per Paragraph 20(1)(e) of the ITA (Jump Code: FINANCING) is not completed, the amount is updated to line 150f.
When Form Deduction as per Paragraph 20(1)(e) of the ITA is completed, the total deduction amount as per the “Québec” section of Form Deduction Summary as per Paragraph 20(1)(e) of the ITA (Jump Code: SFINANCING) is updated to line 150f. Then, if line 395 is overridden, note that this override will not be taken into account for Québec purposes.
When no federal amount is manually entered on line 395 of Schedule 1 or Form Deduction as per Paragraph 20(1)(e) of the ITA (Jump Code: FINANCING) is not completed, this line can be used for other expenses.
See also