Mining Exploration Tax Credit for Personal Income Tax Frequently Asked Questions
The following will help answer your questions about the mining exploration tax credit (METC).
Are partnerships eligible?
Eligible individuals who are active members of a partnership may claim their proportionate share of the partnership's tax credit. An active member of a partnership includes a partner that is engaged in a business similar to that carried on by the partnership. Limited partners are not eligible to claim the credit.
The partnership's tax credit is determined as if the partnership were an eligible taxpayer. Only those qualifying mining exploration expenses incurred by the partnership after March 31, 2003 may be claimed.
The individual or partnership claiming the METC must conduct the exploration activity and incur the expenditures.
To claim the credit, complete the British Columbia Mining Exploration Tax Credit Partnership Schedule (T1249) and submit it with your T1 Income Tax Return.
Can the METC be claimed on exploration funded by grants received under the Prospectors Assistance Program?
Qualifying expenditures must be reduced by any government assistance received or receivable. For example, if $100,000 of qualified mining exploration expenses is claimed and a $10,000 Prospectors Assistance Grant is received, the METC would be ($100,000 - $10,000) x 20% or $18,000.
Can I benefit from the METC if I have no income tax payable?
The METC is a refundable tax credit. If there is no tax otherwise payable, the credit is refundable. For more information, please contact the Canada Revenue Agency at 1-604-666-8430.
Are qualified mining exploration expenses claimed for METC also eligible for flow-through share treatment? Can the METC be "flowed through" to investors?
No, the METC is not eligible for flow-through. However, corporations may flow through exploration expenses to investors, who may be eligible for the mining flow-through share tax credit. Please contact the Canada Revenue Agency at 1 604 666-8430 for more information on mining flow-through shares.