Ontario Innovation Tax Credit (OITC)
Ontario 8% refundable provincial tax credit on eligible Scientific Research and Experimental Development (SR&ED) expenditures.
About this program
The Ontario Innovation Tax Credit (OITC) is an 8% refundable provincial tax credit on qualifying SR&ED expenditures incurred in Ontario by Canadian-controlled private corporations (CCPCs). The credit stacks on top of the federal SR&ED credit (35% refundable for small CCPCs), enabling combined recovery of up to 43% on eligible R&D costs. OITC has a $3 million expenditure limit. Common eligible activities include software development, manufacturing process improvement, life sciences research, and engineering innovation.
Eligibility
Canadian-controlled private corporations (CCPCs) with a permanent establishment in Ontario that incur eligible SR&ED expenditures in Ontario. Standard SR&ED eligibility rules apply (technical advancement, technical uncertainty, scientific method).
Requirements
- Track SR&ED-eligible activities, costs, and technical evidence throughout the year
- Engage an SR&ED specialist or accounting firm for claim preparation
- File Schedule T2SCH566 (OITC) with Ontario tax return