Non-Refundable Tax Credit for a Labour-Sponsored Fund

Currently, individuals purchasing initial qualifying shares in the Fonds de solidarité des travailleurs du Québec (FTQ) or Fondaction are eligible for a 15 percent non-refundable tax credit on amounts paid within the tax year or the first 60 days of the subsequent year, subject to certain conditions. The maximum allowable investment in a labour-sponsored fund to calculate the annual tax credit is limited to $5,000, resulting in a maximum credit of $750. 

In the March 21, 2023, budget, the Quebec government announced a phased-in approach to refining the labour-sponsored fund tax credit's eligibility which would have ended an individual’s ability to claim it. As of the 2024 tax year, individuals whose income for the reference year (two years prior) falls within the highest tax bracket would no longer qualify for this credit on shares purchased post-December 31, 2023. 

Implementing this adjusted eligibility for the non-refundable tax credit for a labour-sponsored fundwill be postponed until January 1, 2027. Therefore, this eligibility criterion will affect tax credits claimed for the tax year 2027 regarding the 2025 income to assess the threshold. 

Was this article helpful?

0 out of 0 found this helpful

Have more questions? Submit a request