Ontario Research and Development Tax Credit (ORDTC)
grant_single|update April 27, 2025
ON, Canada
Non-refundable tax credit for R&D in Ontario
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDate November 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Professional, scientific and technical services
grant_single|grantors
- Ontario Ministry of Finance
- Government of Ontario
grant_single|status
grant_card_status|open
grant_single_labels|preview
Reduce your corporate income tax with a credit of 3.5% for scientific research and experimental development expenditures in Ontario.
grant_single_labels|terms_and_conditions
- Non-refundable tax credit equal to 3.5% of eligible scientific research and experimental development expenditures performed in Ontario for taxation years commencing after May 31, 2016.
- For taxation years that straddle June 1, 2016, the tax credit rate is prorated between 4.5% (before June 1, 2016) and 3.5% (after May 31, 2016).
- For taxation years ending before June 1, 2016, the tax credit rate is 4.5% of eligible expenditures.
- Unused tax credits can be carried back three years or carried forward up to 20 years.
grant_single_labels|projects
- Conducting scientific research projects in Ontario.
- Developing experimental innovations or new technologies through research initiatives.
grant_single|admissibleProjectsExample
$ 12,250
Developing a new AI system to optimize energy consumption
$ 13,300
Developing a sustainable agriculture technology
$ 17,500
Innovative water purification research initiative
$ 14,000
Creating a biotech lab for cancer research
$ 15,750
Implementing a new healthcare data analysis system
$ 21,000
Launching a renewable energy research center
grant_single_labels|admissibility
A corporation must meet certain criteria to be eligible for the Ontario research and development tax credit.
- The corporation must have a permanent establishment in Ontario.
- The corporation must carry on 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.
grant_eligibility_criteria|who_can_apply
- Corporations with a permanent establishment in Ontario
- Corporations conducting scientific research and experimental development in Ontario
grant_eligibility_criteria|who_cannot_apply
- Corporations that are exempt from corporation income tax.
grant_eligibility_criteria|eligible_expenses
- Expenditures incurred for scientific research and experimental development activities carried out in Ontario.
grant_eligibility_criteria|zone
This tax credit is exclusively available to corporations with a permanent establishment in a specific region of Canada. The focus is on businesses conducting qualifying research and development within these geographical boundaries.
- Corporations with a permanent establishment in Ontario, Canada.
grant_single_labels|criteria
There are evaluation and selection criteria for this grant. The evaluation and selection criteria include:
- Having a permanent establishment in Ontario
- Carrying out scientific research and experimental development in Ontario
- Being eligible to claim the federal investment tax credit under section 127 of the federal Income Tax Act
- Not being exempt from corporation income tax
- Filing a scientific research and experimental development expenditures claim on federal form T661 for the tax year
grant_single_labels|apply
1
Determine Eligibility
- Verify that your corporation has a permanent establishment in Ontario and is engaged in scientific research and experimental development in Ontario.
- Ensure the corporation is eligible to claim the federal investment tax credit and is not exempt from corporation income tax.
- Confirm that a federal form T661 scientific research and experimental development expenditures claim has been filed for the tax year.
2
Identify Eligible Expenditures
- Determine expenditures incurred for scientific research and experimental development carried out in Ontario.
- Ensure expenditures meet criteria outlined in section 127 of the federal Income Tax Act (Canada) and are attributable to a permanent establishment in Ontario.
- Reduce eligible expenditures by government assistance, non-government assistance, and contract payments (excluding the Ontario Research and Development Tax Credit or federal Scientific Research and Development Investment Tax Credit).
3
Complete the T2 Corporation Income Tax Return
- Download and complete the Schedule 508, Ontario Research and Development Tax Credit form.
- Prepare the T2 Corporation Income Tax return with all applicable financial data.
4
Submit the Tax Credit Application
- File the completed Schedule 508 along with the T2 Corporation Income Tax return to the Canada Revenue Agency.
- Ensure all documentation is accurate and submitted before the deadline.
5
Manage Unused Tax Credits
If there is an unused portion, determine if it can be carried back three years or carried forward up to 20 years.
6
Address Recapture Rules
Utilize the 23.56% rate for calculating recapture if applicable, in cases where property previously claimed is disposed of or converted to commercial use.
grant_single_labels|otherInfo
- Any unused portion of the tax credit may be carried back three years or carried forward twenty years.
- Recapture rules apply if property previously claimed is later disposed of or converted to commercial use.
- The Canada Revenue Agency administers this credit on behalf of Ontario through the federal tax system.
- The tax credit rate is prorated for taxation years that straddle key rate change dates.
Apply to this program
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