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Published | Category : Income tax - individuals

New Rule for the Non-Refundable Tax Credit for a Labour-Sponsored Fund

Currently, an individual who acquires, as first purchaser, qualifying class shares in the Fonds de solidarité des travailleurs du Québec (FTQ) or Fondaction can claim the tax credit for a labour-sponsored fund. Conditions apply. The non-refundable tax credit is equal to 15% of the amount paid to acquire such shares in the year or in the first 60 days of the following year. The total amount of the shares acquired in a labour-sponsored fund that can be taken into account in calculating the tax credit for a year cannot be more than $5,000, for a maximum tax credit of $750.

As of the 2024 taxation year, a new rule limiting access to the tax credit for shares acquired after December 31, 2023, is being introduced in order to refocus tax assistance on taxpayers with greater savings needs. More specifically, individuals whose taxable income for the base taxation year (the second calendar year preceding the taxation year for which the individual claims the tax credit) was subject to the highest tax rate of the personal income tax table will no longer be able to claim the tax credit.

Consequently, for the 2024 taxation year, the base year will be the 2022 taxation year. The maximum taxable income that can be taken into account for 2022 is $112,655. Therefore, only individuals whose taxable income for the 2022 taxation year did not exceed the $112,655 threshold will be able to claim the tax credit for a labour-sponsored fund for the 2024 taxation year. The ungranted amount of the tax credit cannot be carried forward.

Maximum income for the base year according to the taxation year for which the tax credit is being claimed

Taxation year

Maximum income for the base year

2024

The taxable income for 2022 cannot exceed $112,655.

2025

The taxable income for 2023 cannot exceed $119,910.

For more information, see Additional Information on the Fiscal Measures, Budget 2023-2024 (PDF – 1,418 Ko), on the Ministère des Finances website.

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