Ontario Computer Animation & Special Effects Tax Credit

Overview of the Ontario Computer Animation & Special Effects Tax Credit program:

The Ontario Computer Animation and Special Effects Tax Credit (OCASE) is a refundable tax credit administered jointly by the Canada Revenue Agency (CRA) and Ontario Creates, aimed at encouraging film and television productions to perform computer animation, visual effects, and digital compositing work in Ontario. Eligible corporations can claim 18% of qualifying labour expenditures related to digital animation or special effects services provided in Ontario for eligible productions. The credit applies to work done on both Ontario and non-Ontario productions, and does not require that the production itself qualify for the Ontario Film and Television Tax Credit (OFTTC). To qualify, the corporation must be: A Canadian corporation (not exempt from tax), Carrying on business in Ontario, Primarily engaged (at least 90%) in animation or digital effects activities, and Performing at least 80% of the labour in Ontario. Projects must include eligible genres such as scripted television series, feature films, documentaries, and animated programs. Certain types of productions—such as reality TV, talk shows, sports events, news, and pornography—are excluded. Applicants are required to apply to Ontario Creates for a certificate of eligibility and then claim the credit on their T2 Corporation Income Tax Return.

Benefits of the Ontario Computer Animation & Special Effects Tax Credit program:

• Refundable credit (receive benefit even if no taxes are owed)
• Supports high-tech jobs in animation and visual effects
• Can apply to non-Ontario productions
• Encourages international and domestic productions to use Ontario-based talent
• Enhances Ontarios competitiveness in digital media and film production
• Can be combined with other Ontario and federal incentives (e.g., OFTTC, PSTC)

Eligibility criteria of the Ontario Computer Animation & Special Effects Tax Credit program:

• Eligible applicants must meet the following:
• Be a Canadian-controlled corporation, taxable in Canada, and carrying on business in Ontario
• Primarily (90%+) engaged in digital animation or visual effects activities
• At least 80% of the total labour costs must be paid to individuals carrying out work in Ontario
• Must be involved in an eligible production type, including feature films, TV series, animation, and documentaries
• Excludes news, sports, reality TV, talk shows, pornography, and advertising productions
• Must obtain a certificate of eligibility from Ontario Creates
• Claim must be filed within 18 months of fiscal year-end