Ontario Innovation Tax Credit

Overview of the Ontario Innovation Tax Credit program:

The Ontario Innovation Tax Credit (OITC) is a refundable tax credit designed to support corporations in Ontario that invest in scientific research and experimental development (SR&ED). This credit aims to encourage innovation and technological advancement within the province.

Benefits of the Ontario Innovation Tax Credit program:

• Tax Credit Rate:
• The OITC provides a 8% refundable tax credit on eligible SR&ED expenditures.
• The maximum annual expenditure limit for the credit is $3 million, which can result in a maximum credit of $240,000.

Eligibility criteria of the Ontario Innovation Tax Credit program:

• You are eligible to claim an Ontario innovation tax credit if you meet the following conditions:
• You had a permanent establishment in Ontario during the year.
• You conducted scientific research and experimental development (SR&ED) in Ontario during the year.
• You are not exempt from tax under Part III of the Taxation Act, 2007 (Ontario).
• You are eligible to claim a federal investment tax credit under section 127 of the federal Income Tax Act for the corporation's qualified expenditures.
• You have filed Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and Schedule 31, Investment Tax Credit Corporations, for the tax year.
• Eligible Expenditures:
• The tax credit applies to qualifying expenditures such as wages, materials, machinery, equipment, and overhead costs directly associated with SR&ED activities.