What counts and how long it lasts
Generally, a non-capital loss for a year comes from employment, property or a business. If an allowable business investment loss is larger than your other income, the excess is included as well. For losses arising in a tax year ending after 2005, the CRA says you can generally carry back 3 years and forward 20 years.
Allowable business investment losses are an exception: the longer carryforward does not apply, and the unused part can become a net capital loss. That is a separate topic to raise with an accountant.
Claiming it as an individual
To use a loss from a past year, deduct the unapplied amount on line 25200 of your return. To carry a current-year loss back, complete Form T1A, Request for Loss Carryback, and attach it to your return or send it separately. The CRA says not to file an amended return for the year you want to apply the loss to.
Your available losses are usually shown on your notice of assessment or reassessment. If a loss was never recorded there, ask before relying on it.
Claiming it as a corporation
A corporation tracks losses on Schedule 4, Corporation Loss Continuity and Application. The CRA guide says a current-year non-capital loss can reduce any kind of income, or taxable dividends subject to Part IV tax, for the 3 previous tax years and the 20 following tax years, and that it expires after the carryforward period. A carryback request is made on Schedule 4, filed with the T2 or sent separately to the tax centre.
The closing balance available for future years comes from line 180 of Schedule 4. The CRA’s T2 guide also says you can view non-capital loss balances with the View return balances service in My Business Account.
Illustrative example and cautions
Illustrative example: a corporation loses $40,000 in 2026 after earning taxable income in each of the three previous years. It can ask to apply some or all of the loss against those years, or carry it forward against future profits. Which choice is better depends on the rates and credits in each year.
Losses are subject to special rules after an acquisition of control, and, apart from net capital losses, you cannot use other-year losses to create or increase a non-capital loss. Keep filed returns, assessments and Schedule 4 working papers, and ask before choosing between carryback and carryforward.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Line 25200 – Non-capital losses of other yearsCanada Revenue Agency
- T4012, T2 Corporation – Income Tax Guide: Chapter 3, Page 3 of the T2 return (Schedule 4 losses)Canada Revenue Agency
- About Non-Capital Loss BalanceCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.