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Source verified June 16, 2026
Ontario Innovation Tax Credit (OITC)
Refundable tax credit for R&D in Ontario
Latest source updateLast Update: April 26, 2026Latest change: The page now includes the Schedule 566 claim form and new instructions for downloading, completing, and filing it with the T2 return.View change
Latest source update
Last Update: April 26, 2026
Latest change: The page now includes the Schedule 566 claim form and new instructions for downloading, completing, and filing it with the T2 return.
Ontario Innovation Tax Credit updated
The Ontario Innovation Tax Credit page now includes the Schedule 566 form itself, along with detailed instructions for downloading the accessible PDF, opening it in Acrobat Reader, and filing it with the T2 return. The new form content also adds more specific filing requirements, including a requirement to file Schedule 31 within 18 months of year-end and an option to waive all or part of the credit. The core credit rate and expenditure limit remain the same.
Funding available
Up to 8% of project cost
Deadline
Open continuously
Location
Ontario, Canada
Overview
A refundable tax credit is available for qualifying corporations carrying out scientific research and experimental development in Ontario. The credit rate is 8% for tax years starting after May 31, 2016, and 10% for tax years ending before June 1, 2016.
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Opportunity Score
Moderate potential, but conditions must align.
At a glance
Funding available
Financing goals
- Conduct research and development activities
- Conduct research or evaluation activities
Eligible Funding
- Up to 8% of project cost
Eligible candidates
Eligible Industries
- All industries
Location
- Ontario
Legal structures
- For-profit business
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- Startups
Next Steps
1
Determine your project
2
Validate your eligibility
Activities funded
- Scientific research carried on in Ontario.
- Experimental development carried on in Ontario.
Documents Needed
- Form T661, Scientific Research and Experimental Development Expenditures Claim
- Schedule 31, Investment Tax Credit – Corporations
- Schedule 566, Ontario Innovation Tax Credit
- T2 Corporation Income Tax Return
Official resources
Eligibility
Who is eligible?
- Corporations with a permanent establishment in Ontario
- Corporations carrying on scientific research and experimental development in Ontario
Who is not eligible
- Corporations exempt from corporation income tax.
Eligible expenses
- Qualified scientific research and experimental development expenditures incurred in Ontario.
- Current expenditures related to SR&ED.
- Capital expenditures made before 2014, where applicable.
Ineligible Costs and Activities
- Capital expenditures incurred after December 31, 2013.
- Expenditures reduced by government assistance, non-government assistance, or contract payments, unless otherwise allowed.
Eligible geographic areas
- 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
- Step 1: Confirm eligibility
- Check that the corporation has a permanent establishment in Ontario.
- Confirm that the corporation carried on SR&ED in Ontario during the tax year.
- Confirm eligibility for the federal investment tax credit and filing of Form T661.
- Step 2: Complete the claim form
- Fill out Schedule 566, Ontario Innovation Tax Credit.
- Include the required tax credit calculation information.
- Step 3: File with the T2 return
- Submit Schedule 566 with the T2 Corporation Income Tax Return.
Processing and Agreement
- The Canada Revenue Agency administers the credit on behalf of Ontario.
- The claim is filed with the corporation’s T2 income tax return.
- Associated corporations must share the annual expenditure limit.
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.
Frequently Asked Questions about the Ontario Innovation Tax Credit (OITC) Program
What is the Ontario Innovation Tax Credit (OITC)?
A refundable tax credit is available for qualifying corporations carrying out scientific research and experimental development in Ontario. The credit rate is 8% for tax years starting after May 31, 2016, and 10% for tax years ending before June 1, 2016.
How much funding can be received?
Ontario Innovation Tax Credit (OITC) Funds up to 8% of admissible expenses.
Who is eligible for the Ontario Innovation Tax Credit (OITC) program?
To be eligible for the Ontario Innovation Tax Credit (OITC) program, you must:
Permanent establishment in Ontario
R&D carried on in Ontario
Eligible for federal investment tax credit
What expenses are eligible under Ontario Innovation Tax Credit (OITC)?
Scientific research carried on in Ontario.
Experimental development carried on in Ontario.
Who can I contact for more information about the Ontario Innovation Tax Credit (OITC)?
You can contact Ontario Ministry of Finance.
Where is the Ontario Innovation Tax Credit (OITC) available?
The Ontario Innovation Tax Credit (OITC) program is available the province of Ontario.
Is the Ontario Innovation Tax Credit (OITC) a grant, loan, or tax credit?
Ontario Innovation Tax Credit (OITC) is a Tax Credits