Ontario Computer Animation and Special Effects Tax Credit

The Ontario Computer Animation & Special Effects Tax Credit (OCASE) is available to qualifying corporations that are Canadian or foreign-owned, have a permanent establishment in Ontario, and file an Ontario corporate tax return. Qualifying corporations may include animation or visual effects houses, post-production houses, and film and television production companies that perform eligible computer animation and special effects activities. Eligible productions must be created for commercial exploitation, not in excluded genres, and have received an OFTTC or OPSTC certificate. Eligible activities include designing, modeling, rendering, lighting, painting, animating, and compositing, among others. Eligible expenditures include salaries and wages for Ontario residents, freelancers, and certain incorporated freelancers paid by the qualifying corporation. To claim the OCASE Tax Credit, applications are made to Ontario Creates for a Certificate of Eligibility, which is then filed with the Canada Revenue Agency. There are specific guidelines and requirements for each aspect of the grant, and thorough documentation and adherence to the rules are essential to qualify for the credit.

- The OCASE Tax Credit is based on eligible Ontario labour expenditures incurred by a qualifying corporation during a taxation year with respect to eligible computer animation and special effects activities. - The tax credit amount is calculated as 18% of the eligible Ontario labour expenditures incurred by the qualifying corporation. - Eligible productions must be created for commercial exploitation and have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit. - Eligible activities include designing, modelling, rendering, lighting, painting, animating, and compositing directly in support of eligible animation or visual effects. - Qualifying labour expenditures include salaries, wages, and payments to freelancers for eligible activities carried out in Ontario. - The OCASE Tax Credit is administered jointly by Ontario Creates and the Canada Revenue Agency. - Application for the Certificate of Eligibility is made to Ontario Creates, which is then filed with the Canada Revenue Agency for claiming the tax credit. - Residency status is important in determining eligible labour expenditures for the tax credit. - Assistance in the form of grants, subsidies, and forgivable loans may grind the tax credit amount. - Crowdfunding may be considered assistance depending on the model used. - If a product/production is found to be ineligible, the applicant may be required to withdraw it from review. - Applicants can appeal the amount of tax credit received through the CRA's objections and appeals process. - For more information or assistance, applicants can contact the tax credit department at Ontario Creates.

To apply for the Ontario Computer Animation & Special Effects Tax Credit (OCASE), you need to follow these steps: 1. Ensure your production meets the eligibility criteria: - Your production must be created for commercial exploitation. - It should not be in an excluded genre or contrary to public policy. - You must have received an OFTTC or OPSTC certificate for the production. 2. Determine the eligible computer animation and special effects activities: - These activities must be carried out in Ontario directly in support of eligible animation or visual effects. - Certain activities like audio effects, in-camera effects, credit rolls, etc., are not eligible. 3. Calculate your qualifying labour expenditures: - Include salaries, wages, and payments to freelancers directly related to eligible activities in Ontario. 4. Apply for a Certificate of Eligibility: - Submit your application to Ontario Creates for a Certificate of Eligibility for the relevant taxation year. 5. File your claim with the Canada Revenue Agency (CRA): - Include the Certificate of Eligibility with your tax return to claim the OCASE Tax Credit. 6. Adhere to deadlines and fees: - Ensure timely submission to avoid missing out on potential tax credit. - Keep in mind that there is an additional filing fee for applications received over 24 months after the year-end.

- Applicants should ensure that their productions have received an OFTTC or OPSTC Certificate of Eligibility to be eligible for the OCASE tax credit. - The timing of the OFTTC or OPSTC Certificate of Eligibility can impact the OCASE application process, so applicants may need to stagger their applications accordingly. - Productions exhibited solely on online platforms may be eligible for the OCASE tax credit under specific conditions. - Ontario Creates follows CAVCO definitions for excluded genres, so applicants should be aware of these definitions. - Talk shows are ineligible for Ontario tax credits. - For live-action productions, producers can make a direct OCASE claim for specific digital effect-related costs. - 3D work for live-action productions or conversions from 2D to 3D can be eligible for the OCASE tax credit. - There isn't a standardized list for eligible positions in animated productions, so positions must directly relate to the creation of eligible computer animation activities. - Understanding residency guidelines is crucial as they impact the eligibility of labour expenditures. - Assistance types that may grind the tax credit include grants, subsidies, and forgivable loans. - Crowdfunding models and their implications should be considered regarding tax credit eligibility. - Certificates of eligibility should be submitted to the CRA in the appropriate manner. - Consider the tax credit administration fee and additional fees for late applications or amendments. - In case of ineligibility, applicants may need to withdraw productions, and determinations are not subject to standard objections and appeals processes. - Applicants can appeal the amount of the tax credit received through the CRA's objections and appeals process.