Ontario Innovation Tax Credit (OITC)

Q: How much funding can be received?

Ontario Innovation Tax Credit (OITC) Funds up to 8% of admissible expenses.

Q: What is the deadline to apply?

The deadline to apply is not specified.

Q: Is the Ontario Innovation Tax Credit (OITC) a grant, loan, or tax credit?

Ontario Innovation Tax Credit (OITC) is a Tax Credits

Q: Who are the financial supporters of the Ontario Innovation Tax Credit (OITC)?

Ontario Innovation Tax Credit (OITC) is funded by Ontario Ministry of Finance, Government of Ontario

Q: Who is eligible for the Ontario Innovation Tax Credit (OITC) program?

To be eligible for the Ontario Innovation Tax Credit (OITC) program, you must: • The corporation must have a permanent establishment in Ontario. • The corporation must carry out scientific research and experimental development in Ontario during the year. • The corporation must be eligible to claim the federal investment tax credit under section 127 of the federal Income Tax Act (Canada).

Q: Who can I contact for more information about the Ontario Innovation Tax Credit (OITC)?

You can contact Ontario Ministry of Finance.

Q: Where is the Ontario Innovation Tax Credit (OITC) available?

The Ontario Innovation Tax Credit (OITC) program is available the province of ON.

Last Update: July 22, 2025

ON, Canada

Refundable tax credit for R&D in Ontario

At a glance

Eligible Funding

Up to 8% of project cost

Timeline

Open Date : November 14, 2019

Financing Type

Tax Credits

Eligible Industries

Professional, scientific and technical services

Funds Providers

Unspecified

Program status

Open

Overview

Get a refundable tax credit of 8% for innovative scientific research and experimental development expenditures.

Activities funded

Examples of admissible projects:

$ 17,600

Biofuel research project aiming for renewable energy solutions

$ 20,000

New quantum computing research project

$ 16,000

Development of sustainable bioplastics

$ 14,400

Innovative agricultural techniques for crop yield improvement

$ 12,000

Development of a new AI algorithm for medical diagnostics

$ 13,600

Development of a new cybersecurity protocol to protect smart cities

Eligibility

A corporation must meet several criteria to qualify for the Ontario innovation tax credit.

The corporation must have a permanent establishment in Ontario.
The corporation must carry out scientific research and experimental development in Ontario during the year.
The corporation must be eligible to claim the federal investment tax credit under section 127 of the federal Income Tax Act (Canada).
The corporation must not be exempt from corporation income tax.
The corporation must have filed a scientific research and experimental development expenditures claim on federal form T661 for the tax year.

Who is eligible?

Corporations with a permanent establishment in Ontario that engage in scientific research and experimental development can apply for the Ontario Innovation Tax Credit. These corporations must not be exempt from corporation income tax and should be eligible to claim the federal investment tax credit under section 127 of the federal Income Tax Act (Canada). They should also file a scientific research and experimental development expenditures claim using the federal form T661 for the tax year.

Eligible expenses

The Ontario Innovation Tax Credit supports projects focusing on scientific research and experimental development in Ontario. Eligible activities include those directly engaged in advancing scientific research and the implementation of experimental development processes.

Conducting scientific research in Ontario related to the development of new products, processes, or technologies.
Undertaking experimental development projects aimed at improving existing products or processes within Ontario.

Eligible geographic areas

This grant is available to corporations with a permanent establishment in Ontario. Eligibility is aligned with the regional focus of the grant, which aims to support innovation within the province.

Corporations with a permanent establishment in Ontario.

Selection criteria

There are evaluation and selection criteria for this grant. The criteria include:

Corporation must have a permanent establishment in Ontario
Carries out scientific research and experimental development in Ontario during the year
Eligible to claim the federal investment tax credit under section 127 of the federal Income Tax Act (Canada)
Has filed a scientific research and experimental development expenditures claim on federal form T661 for the tax year

How to apply

Ensure Eligibility

Verify that your corporation has a permanent establishment in Ontario.
Ensure your corporation conducts scientific research and experimental development in Ontario.
Confirm eligibility for the federal investment tax credit under section 127 of the federal Income Tax Act (Canada).
Ensure the corporation is not exempt from corporation income tax.
Make sure a scientific research and development expenditures claim has been filed on federal form T661 for the tax year.

Compile Qualified Expenditure Information

Identify and calculate qualified expenditures incurred for scientific research and experimental development in Ontario.
Ensure expenditures align with section 127 of the federal Income Tax Act.
Adjust qualified expenditures by subtracting government and non-government assistance, excluding certain tax credits.

Complete Form T2 Corporation Income Tax Return

Obtain the T2 Corporation Income Tax Return form from the Canada Revenue Agency.
Complete all necessary information on the T2 form, reflecting your corporation's financial data.

Fill in Schedule 566

Download and complete Schedule 566, Ontario Innovation Tax Credit.
Detail all qualified expenditures and the calculated tax credit on Schedule 566.

Submit the Application

Submit the completed T2 Corporation Income Tax Return along with Schedule 566 to the Canada Revenue Agency.
Ensure submission is done within the timeline specified by CRA for filing corporation tax returns.

Additional information

Here are additional relevant details for the Ontario Innovation Tax Credit:

The Ontario Ministry of Finance requires detailed documentation of eligible activities and expenditures in case of an audit.
The refundable nature of the tax credit allows for a refund even if there is no tax payable, providing cash flow benefits to qualifying corporations.
The tax credit can be carried back three years or carried forward 20 years, allowing flexibility in financial planning for corporations.
Corporations should maintain clear records of any government or non-government assistance to accurately adjust qualified expenditures.

Documents and links

Ontario Innovation Tax Credit (OITC)

Apply to this program

Frequently Asked Questions about the Ontario Innovation Tax Credit (OITC) Program

Here are answers to the most common questions about the Ontario Innovation Tax Credit (OITC). This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.