TurboTax: Line 121 and Line 420

 

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Relevant Material: "

Line 12100 – Interest and other investment income

Interest and other investment income form part of your total income and must be reported on your return.

Interest, foreign interest and dividend income, foreign income, foreign non-business income and certain other income are all amounts that you report on your return as interest and other investment income. They are usually shown on a T5 slip, T3 slip and T5013 slip.

You may not receive a T5 slip if the investment income is less than $50, but you must still report the income.

You also have to report the interest on any tax refund that you received in 2024 as shown on your notice of assessment or reassessment" (Line 12100 - Interest and other investment income - Canada.ca) 

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Relevant Material: "n Canada Revenue Agency (CRA) tax filings, Line 12100 (previously known as Line 121 before 2019) is the specific field used to report interest and other investment income. 
Significance of Line 12100
  • Income Reporting: It is used to declare all interest earned from Canadian and foreign sources, including bank accounts, Guaranteed Investment Certificates (GICs), term deposits, treasury bills, and earnings on life insurance policies.
  • Tax Impact: Unlike dividends or capital gains, income reported on this line is taxed as ordinary income at your full marginal tax rate, meaning it does not receive special tax credits or reduced inclusion rates.
  • Mandatory Disclosure: You must report all interest earned, even if the amount is less than $50 and you did not receive a T5 information slip. 
Common Sources to Report on Line 12100
  • T5 Slips: Amounts from boxes 13, 14, 15, and 30.
  • T3 Slips: Amounts from box 25.
  • T5013 Slips: Amounts from boxes 128 and 135.
  • Tax Refunds: Any interest paid to you by the CRA on a previous year's tax refund.
  • Foreign Investment: Foreign interest and dividends (reported in Canadian dollars). 
Key Rules for 2025 Filing
  • Accrual Reporting: For long-term investments like multi-year GICs, you must report the interest earned during each complete investment year, even if it hasn't been paid out yet.
  • Joint Accounts: Interest from joint accounts is generally reported based on the proportion each person contributed to the account.
  • Attribution Rules: Special rules may require you to report income on your return if the money was loaned or transferred to a spouse or minor child. .." (Google) 
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Relevant Material: "

Line 42000 – Net federal tax

Your net federal tax is calculated on your return. It is your federal tax payable on your taxable income minus your federal non-refundable tax credits and various other federal tax credits that may apply to you.

Recapture of investment tax credit

If you have to repay all or part of an investment tax credit that you previously received for scientific research and experimental development or for child care spaces, complete Form T2038(IND), Investment Tax Credit (Individuals), to calculate the amount you have to repay.

Enter the result on the line for "Recapture of investment tax credit" on your return.

Federal logging tax credit

If you paid logging tax to a province for logging operations you performed in the province, you may be able to claim a logging tax credit.

To calculate your credit, use the lesser of the following two amounts for each province you had a logging operation in:

  • 66.6667% of the logging tax paid for the year to the province
  • 6.6667% of your net logging income for the year in the province

Enter the total of the credits for the year for all provinces, up to 6.6667% of your taxable income from line 26000 of your return, not including any amounts on lines 20800, 20805, 21000, 21400, 21500, 21900, and 22000 of your return..." (Google) 


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Relevant Material: "In the context of the Canada Revenue Agency (CRA), "Line 420" (now Line 42000) and "RC420" refer to specific tax reporting fields and forms used to determine federal tax liability and manage tax-free savings.

Line 420 (Line 42000): Net Federal Tax 
On a Canadian individual income tax return (T1), Line 42000 (formerly Line 420) represents your Net Federal Tax. 
  • Significance: This is the total amount of federal tax you owe after applying all non-refundable tax credits. It is a critical figure because it is added to other amounts (like provincial tax and CPP contributions) to calculate your total tax payable for the year.
  • Calculation: You calculate this amount on Schedule 1 of your return by applying federal tax rates to your taxable income and then subtracting various credits (such as the basic personal amount). 
Form RC420: TFSA Exempt Contribution
The CRA also uses Form RC420, titled Designation of an Exempt Contribution Tax-Free Savings Account (TFSA). 
  • Significance: This form is used by a surviving spouse or common-law partner who has been designated as a beneficiary of a deceased person's TFSA.
  • Purpose: It allows the survivor to transfer funds from the deceased's TFSA into their own TFSA as an "exempt contribution," meaning the transfer does not affect their own TFSA contribution room. 
Other Contexts
  • 420 Culture: Outside of taxation, "420" is a significant cultural reference to cannabis. In Canada, this often involves large annual protests or celebrations, most notably on Parliament Hill in Ottawa every April 20th.
  • 428 Forms: While Line 420 covers federal tax, Form 428 (e.g., ON428, AB428) is the corresponding form used to calculate Provincial or Territorial tax. .." (Google) 
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