Nova Scotia Labour-Sponsored Venture Capital Tax Credit

Important: Effective 2017, you can no longer claim the labour-sponsored funds tax credit for a federally registered fund.

If you purchased eligible shares from a labour-sponsored venture capital (LSVC) corporation in 2018 or within the first 60 days of 2019, and you are at least 19, you might be able to claim the Nova Scotia labour-sponsored venture capital tax credit.

Eligible investments are:

  • Newly issued common voting shares that are non-redeemable
  • Non-convertible, and
  • Non-restricted in profit sharing or participation upon dissolution

With this non-refundable credit, you can claim up to $2,000 to reduce your provincial tax payable. The corporation you invested in will issue you a NSLVS form which will show you the credit amount you can claim. Keep in mind, you’ll need to hold onto your shares for at least 8 years, or you’ll need to pay back your credit amount.

Unfortunately, if your credit amount is more than your provincial tax payable, you won’t be able to carry forward the unused portion to a future year.

Note: The shares can’t be used to claim any other tax credit or deduction, except as an RRSP deduction.

Where do I claim this?

Follow these steps in H&R Block's 2018 tax software:

Before you begin, make sure that you tell us that you lived in Nova Scotia on December 31, 2018.

  1. Under the PREPARE tab, click the IN THIS SECTION icon.

  2. In the Investments box, click the Add This Topic button.

  3. Click the PENSION PLANS AND INVESTMENTS icon.  

  4. Under the INVESTMENT INCOME heading, select the checkbox labelled Nova Scotia labour-sponsored venture capital tax credit, then click Continue.

  5. When you arrive at the page for the Nova Scotia labour-sponsored venture capital tax credit, enter your information into the tax software.

Once you’ve completed this page, you’ll also need to enter the tax credit amount shown on your NSLVS form on the All other deductions page of H&R Block’s tax software to claim the net cost of shares for your provincially registered fund. To do this:

  1.  On the PREPARE tab, click the OTHER icon. 

  2. Under the MISCELLANEOUS heading, select the checkbox labelled All other deductions, then click Continue.

  3. When you arrive at the all other deductions page, enter the provincial tax credit amount as shown on your paper NSLVS form in the field labelled Provincial labour-sponsored funds tax credit.

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