Open
Source verified July 6, 2026
Ontario small business deduction (SBD)
Reduces Ontario corporate tax for eligible CCPCs
Funding available
Varies by project
Deadline
Open continuously
Location
Ontario, Canada
Who can apply
Canadian-controlled private corporations (CCPCs) that were CCPCs throughout the tax year
See full eligibility
Overview
The Ontario Small Business Deduction reduces Ontario basic income tax for eligible CCPCs. It applies to Ontario small business income at an 8.3% deduction rate, resulting in a 3.2% lower effective tax rate.
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Opportunity Score
Moderate potential, but conditions must align.
At a glance
Funding available
Financing goals
- No objectives are currently available
Eligible Funding
- Varies by project
Eligible candidates
Eligible Industries
- All industries
Location
- Ontario
Legal structures
- For-profit business
Annual revenue
- $ 50,000,000 maximum revenue
Organisation size
- All organization sizes
Audience
- Startups
Next Steps
1
Determine your project
2
Validate your eligibility
Documents Needed
- Schedule 500, Ontario Corporation Tax Calculation
- Schedule 5, Tax Calculation Supplementary – Corporations
- T2 Corporation Income Tax Return
Official resources
Application form
Supporting document
Eligibility
Who is eligible?
- Canadian-controlled private corporations (CCPCs) that were CCPCs throughout the tax year
Who is not eligible
- CCPCs, including associated corporations, with taxable capital employed in Canada of more than $10 million in the previous tax year
- CCPCs with taxable capital employed in Canada of $50 million or more in the previous tax year
Eligible geographic areas
- Ontario
How to apply
- Calculate the deduction using Part 2 of Schedule 500.
- Enter the Ontario small business deduction amount on line 402 of Schedule 5, Tax Calculation Supplementary – Corporations.
Additional information
- The Ontario small business deduction is calculated using the corporation's Ontario small business income and the small business deduction rate for the year.
- The reduction and elimination of the deduction are based on the taxable capital employed in Canada during the previous tax year.
- Ontario small business income is capped by the corporation's Ontario taxable income and is determined using the Ontario domestic factor.
- Schedule 500 is used as a worksheet for calculation and does not need to be filed with the corporate tax return.
Contacts
Frequently Asked Questions about the Ontario small business deduction (SBD) Program
What is the Ontario small business deduction (SBD)?
The Ontario Small Business Deduction reduces Ontario basic income tax for eligible CCPCs. It applies to Ontario small business income at an 8.3% deduction rate, resulting in a 3.2% lower effective tax rate.
Who is eligible for the Ontario small business deduction (SBD) program?
To be eligible for the Ontario small business deduction (SBD) program, you must:
CCPC throughout the tax year
Ontario taxable income required
Phased out above $10 million taxable capital employed in Canada
Who can I contact for more information about the Ontario small business deduction (SBD)?
You can contact Ontario Ministry of Finance or by phone at 1-800-959-2221.
Where is the Ontario small business deduction (SBD) available?
The Ontario small business deduction (SBD) program is available the province of Ontario.
Is the Ontario small business deduction (SBD) a grant, loan, or tax credit?
Ontario small business deduction (SBD) is a Tax Credits
Who are the financial supporters of the Ontario small business deduction (SBD)?
Ontario small business deduction (SBD) is funded by Ontario Ministry of Finance, Government of Ontario, Canada Revenue Agency (CRA)