Corporations who participated in the provincial political process by making a financial contribution to an Ontario candidate, constituency association, or political party may be able to claim a tax credit.
The amount of this non-refundable tax credit generally depends on the corporation’s total eligible contributions and its Ontario income tax payable for the tax year.
For tax years ending in 2009 to 2013, the maximum tax credit that a corporation can claim in a year was $2,139. This was based on maximum allowable annual contributions of $18,600.
For tax years ending in 2014 to 2018, the maximum tax credit that a corporation can claim in a year is $2,294. This is based on maximum allowable annual contributions of $19,950.
Unused contribution amounts can be carried forward for up to 20 years.
An eligible contribution is made to an:
You can claim the tax credit, if the corporation:
The tax credit cannot be claimed for contributions to municipal or federal elections.
Under the Ontario Election Finances Act, there are contribution limits.
The contribution limits for the 2009 to 2013 calendar years were:
The contribution limits for the 2014 to 2018 calendar years are:
The tax credit is equal to the least of:
The corporation's eligible contribution balance is the total of the eligible contributions made in the current tax year and any available carry forwards from the previous 20 tax years.
|Basic tax rate||Applicable to proportionate number of days in the tax years that are:|
|12%||after June 20, 2010 and before July 1, 2011|
|11.5%||after June 30, 2011|
The indexation factor, under the Ontario Election Finances Act, is adjusted every five years based on the Consumer Price Index. The indexation factor for the 2009 to 2013 calendar years was 1.24. The indexation factor for the 2014 to 2018 calendar years is 1.33.
For a tax year straddling January 1, 2014, the indexation factor is 1.33 and is applicable to all eligible contributions made in the tax year, including those made in the 2013 calendar year.
The corporation’s Ontario income tax payable is determined before deducting the:
The tax credit is not adjusted for situations where the Ontario allocation is less than 100 per cent.
The tax credit is not adjusted for tax years that are less than 365 days.
Corporations may claim the tax credit on Schedule 525 and file it with their T2 corporation income tax return.
Note: It is important to file your return as a completed package. Incomplete returns generate delays in processing.
Political contribution receipts do not have to be attached to your corporate income tax return. However, a breakdown should be provided in order to verify that the political contributions have not exceeded the maximum limits. Keep all official receipts in case you are asked for them later during an audit.