424 – Tax credit for a labour-sponsored fund

You can claim this credit if, in 2017 or the first 60 days of 2018, you acquired, as first purchaser, class A shares in the Fonds de solidarité des travailleurs du Québec (FTQ) or class A or class B shares in Fondaction (le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l'emploi).

To calculate your credit, add the tax credits shown on your RL-10 slip and the tax credits you did not use before 2017 and then subtract the cancelled credits shown on your RL-10 slip from the result. However, the total amount of the shares acquired in a labour-sponsored fund that you can take into account in calculating your credit cannot be more than $5,000.

Under certain conditions, you can carry forward the portion of the credit you are not claiming for 2017 to reduce your income tax for future years. For example, if the total of the amounts shown in boxes A and G of your RL-10 slip is more than $5,000, the surplus can be used to calculate your credit for future years.

You are not entitled to this credit if any of the following situations apply to you:

  • You were born before January 1, 1953. 
  • You were born before January 1, 1973, and were either retired or on pre-retirement leave in 2017.
  • You asked the Fonds de solidarité des travailleurs du Québec (FTQ) or Fondaction to redeem your shares within 60 days of acquiring them. 
  • You transferred the acquired shares to a spousal RRSP or a spousal RRIF, and your spouse:
    • was born before January 1, 1953; or
    • was born before January 1, 1973, and was either retired or on pre-retirement leave.

A person is considered to be retired or on pre-retirement leave if, in 2017, the person:

  • received a retirement pension under the Québec Pension Plan (QPP) or the Canada Pension Plan (CPP); 
  • received pension or annuity payments under one of the following (unless the payments he or she received were further to the death of his or her spouse):
    • a registered pension plan (RPP)
    • a registered retirement savings plan (RRSP)
    • a registered retirement income fund (RRIF)
    • a pooled registered pension plan (PRPP), including a voluntary retirement savings plan (VRSP)
    • a deferred profit-sharing plan (DPSP); or
  • was on paid leave and no return to work was provided for (for example, the person was using his or her accumulated sick leave before retiring).

However, a person is not considered to be retired or on pre-retirement leave if the total of the person's employment and business income for 2017 was over $3,500, and he or she had yet to turn 65 or redeem all or part of his or her shares by the end of the year.

Purchase of replacement shares

If you purchased replacement shares (RL-10) because you redeemed your shares in a labour-sponsored fund in a previous year in order to participate in the Home Buyers' Plan (HBP) or the Lifelong Learning Plan (LLP), you cannot claim the credit for the replacement shares.

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