CO-1029.8.36.II, Tax Credit for Investment and Innovation

A separate copy of Form CO-1029.8.36.II must be completed for each entity (corporation, partnership, interposed partnership or joint venture) that claims a tax credit and for each territory where the corporation, the partnership or the joint venture used the specified property.

In addition, a separate copy of Form CO-1029.8.36.II must be completed for each period in which specified expenses are incurred.

To enter the information related to the specified properties and the specified expenses incurred during the taxation year to acquire them, you can access Form CO-1029.8.36.II PARTS 2 AND 3 from Part 2-3, Information about the specified property and specified expenses.

Tax credit refundability

Following the presentation of the economic update on November 7, 2023, and the release of the Information Bulletin 2023-6 by the Ministère des Finances du Québec, the tax credit becomes fully refundable, regardless of the corporation’s assets or gross income, in respect of specified expenses incurred in a taxation year that begins after December 31, 2023.

The amount on line 103, which determines the portion of the tax credit that is entirely refundable, has been split into two custom line to calculate the portion of the tax credit that relates to specified expenses incurred after December 31, 2023:

In a taxation year that begins after December 31, 2023, in the case of a corporation;
In fiscal periods that begin after December 31, 2023, in the case of partnerships of which the corporation is a member.

The custom line Portion of the tax credit relating to the specified expenses incurred by the partnerships of which the corporation is a member for their fiscal periods beginning after December 31, 2023, corresponds to the total of the tax credit amounts on lines 87m, 90m and 93m that relate to the specified expenses incurred by qualified partnerships of which the corporation is a member directly or through interposed partnerships. The amount on this line is calculated except if:

There is more than one copy of the form for which the eligible entity is a qualified partnership of which the corporation is a member directly or through an interposed partnership for which the specified expenses have incurred after December 31, 2023;
At least one of these partnerships has a fiscal period that begins after December 31, 2023, and at least one of these partnerships has a fiscal period that begins before January 1, 2024.
The amount on line 72, Specified expenses for the year, exceeds the $100,000,000 annual cumulative limit (or, when the corporation is associated with another qualified corporation, exceeds the portion of the annual cumulative limit allocated to the corporation on line 73.

The custom line Portion of the tax credit relating to the specified expenses incurred by the corporation in a taxation year beginning after December 31, 2023, corresponds, when the taxation year of the corporation begins after December 31, 2023, to the positive difference between the amount on line 101 and the amount on custom line Portion of the tax credit relating to the specified expenses incurred by the partnerships of which the corporation is a member for their fiscal periods beginning after December 31, 2023.

To determine the refund rate of the tax credit for the taxation year on line 129, the program performs the following calculation on line 124:

The total assets of the corporation for the preceding taxation year corresponds to the amount on the Total line under the statement Indicate the total assets as per the financial statements of the prior year or if this is the first fiscal period, the amount from the beginning of the year for: in the Information about the corporation section of the CO-17 return (Jump Code: QJ);
The gross revenue of the corporation for the preceding taxation year corresponds to the total of the amounts entered on the line Gross revenue of the corporation for the preceding taxation year in the Québec CO-1029.8.36.II – Tax credit for investment and innovation section of Schedule 9 WORKCHART (Jump Code: 9 WORKCHART) in the copy of the reporting corporation and copies of the associated corporations for which the relationship code is other than 4, Related but not associated and for which the answer to the question Is the corporation covered by sections 21.20.7 to 21.20.9 QTA (it is not associated with the filing corporation for purposes of the Québec tax return)? is No.

The non-refundable portion of the tax credit for investment and innovation of a qualified corporation can be carried back to the prior three taxation years (that end after March 10, 2020) and carried forward 20 taxation years.

Printing the form

If you want to print only the completed copies of Form CO-1029.8.36.II, we recommend that you create a print format and set the value to If applicable or Always in the Print when? column for Forms CO-1029.8.36.II and CO-1029.8.36.II PARTS 2 AND 3. This way, all copies of Parts 2 and 3 will print for each copy of the form.