Special Tax Credits for Small Businesses and Corporations in Ontario

by Craig Anthony

2 min read

To foster a productive environment for businesses, the Ontario government offers a number of provincial tax credits. Applicable to a variety of industries, these credits help offset multiple costs and are designed to help businesses succeed.

Training Tax Credits

Ontario offers two training tax credits: the apprenticeship credit and co-operative education credit. For both credits, corporations may claim 25% of eligible expenses, and small businesses may claim 30%. The apprenticeship credit is worth up to $15,000. It includes expenses incurred during a 36-month apprenticeship program in manufacturing, plumbing, or over 100 other trades. The co-operative learning credit is worth up to $3,000 per placement, and it’s designed for businesses that create 10-week to 4-month educational work opportunities for high school or college students.

Creative and Cultural Credits

Credits that encourage creative and entertainment companies to do business in Ontario include:

  1. Book Publishing Credit: Worth 30% of expenditures related to publishing books, this credit provides up to $30,000 per title.
  2. Computer and Animation Tax Credit: If you make computer animation or special effects, you can qualify for an 18% tax credit for eligible labour expenses. These expenses include paying employees and hiring freelancers.
  3. Ontario Film and Television Tax Credit: With this credit, you can claim 40% of labour expenses up to $240,000 and 35% of expenses over that amount. You can also earn a 10% bonus credit if you shoot outside the Toronto Greater Area.
  4. Ontario Production Services Tax Credit: Production companies can claim up to 21.5% of eligible expenditures, but at least a quarter of the claimed expenses must be related to labour in Ontario.

Ontario Business Research Institute Tax Credit

Research hospitals and nonprofits designated as research hospitals can claim this refundable credit. Worth up to $4 million, the credit is 20% of eligible expenses for scientific research and experimental development. If you do the accounting for an Ontario or federal Centre of Excellence, you can also claim this credit for that organization.

Ontario Innovation Tax Credit

Corporations that do scientific research and experimental development may claim the Ontario Innovation Tax credit worth 8% of qualified expenses. You can only claim this credit if you’re eligible for the federal investment tax credit. The Ontario Research and Development Tax Credit is very similar, but it’s only worth 3.5 % of eligible expenditures.

Community Food Program Donation Tax Credit

If you’re a farmer or part of a farming co-op, you may be able to claim this special credit. The credit is for agricultural donations to eligible community programs such as food banks. In addition to claiming a charitable deduction worth the fair market value of the donation, you get to claim an extra 25% credit. For example, if you donate $10,000 worth of food, you can claim a charitable giving deduction that pretty much eliminates the income tax on $10,000 of earnings, and you can also claim a tax credit of $2,500.As a business owner, you should claim all the credits available to you to save money on your tax return. Luckily, you can claim many credits retroactively if you miss them.

References & Resources

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