The Ontario Research and Development Tax Credit (ORDTC) is a non-refundable tax credit. It is available to corporations that carry out scientific research & experimental development (SR&ED) work in Ontario. The ORDTC replaced the Ontario SR&ED tax deduction for tax years ending after December 31, 2008.
The Canada Revenue Agency (CRA) administers the program on behalf of Ontario through the federal income tax system.
The Benefit
The ORDTC provides a 4.5 per cent tax credit based on eligible SR&ED expenses carried out in Ontario. The credit may be used to reduce corporate income tax payable. Any unused credit may be:
- carried back three years to tax years ending after December 31, 2008 or
- carried forward 20 years.
Eligibility
Corporations that incur eligible expenses may claim the credit. An eligible expense must be:
- on account of SR&ED carried on at a permanent establishment in Ontario and
- a qualified expense in respect of SR&ED for purposes of the federal Investment Tax Credit.
How to Apply
Corporations may claim the tax credit on Schedule T2SCH508, filed with their T2 Corporation Income Tax Return.
