Non-capital losses are losses from employment, property, or your business, and you can use these losses to offset income on your tax return. While capital losses must only be used to offset capital gains, non-capital losses can be used to offset business and employment income, retirement income, and income from a variety of other sources.
If you don’t have enough income in the current year to use all of your non-capital losses, you may save them and use them anytime in the next 20 years. This is called carrying the loss forward. Alternatively, you may roll the loss back to one of the previous three year’s returns. There is a notable exception for non-capital losses that fall under the category of allowable business investment losses. If you have ABILs, you may only carry them forward for ten years. At that point, unused ABIL becomes part of your net capital losses.
