For taxation years that commence after May 31, 2016, qualifying corporations can claim a 8 per cent refundable tax credit for qualified expenditures on scientific research and experimental development performed in Ontario. For taxation years that end before June 1, 2016, the tax credit rate is 10 per cent. The tax credit rate is prorated for taxation years straddling June 1, 2016.
This tax credit and the Ontario research and development tax credit may be claimed on the same scientific research and experimental development expenditures.
For taxation years that commence after May 31, 2016, the maximum tax credit is $240,000 based on an expenditure limit of $3 million. The maximum tax credit is $300,000 for taxation years that end before June 1, 2016. For taxation years straddling June 1, 2016, the maximum tax credit amount is prorated. The expenditure limit is gradually reduced if:
Associated corporations must share the expenditure limit. The limit is also reduced for a short tax year based on the number of days in the tax year, in proportion to 365.
You can claim the credit, if the corporation:
A qualified expenditure:
Qualified expenditures are reduced by government assistance, non-government assistance and contract payments. The Ontario research and development tax credit, Ontario Business Research Institute Tax Credit, Ontario Innovation Tax Credit and federal Scientific Research and Experimental Development investment tax credit are not government assistance for purposes of determining the Ontario innovation tax credit qualified expenditures. Under certain conditions, the receipt of a contract payment will not reduce qualified expenditures.
Corporations may claim the tax credit on Schedule 566 and file it with their T2 corporation income tax return.
The Canada Revenue Agency administers the program on behalf of Ontario through the federal income tax system.
Contact the Canada Revenue Agency with your questions at 1 800 959‑5525 or 1 800 665ᑙ0354 for teletypewriter (TTY).