Ontario Innovation Tax Credit (OITC)
Ontario Ministry of Finance / Canada Revenue Agency · R&D tax credit
Varies8% refundable tax credit on qualified SR&ED expenditures incurred in Ontario, up to a C$3M annual expenditure limit (limit phases out with taxable income and capital)
Ontario's refundable R&D tax credit that stacks on top of federal SR&ED for corporations with a permanent establishment doing SR&ED in Ontario.
Key terms
- Must have a permanent establishment in Ontario and have carried on SR&ED in Ontario during the year
- Must be eligible to claim the federal SR&ED investment tax credit and have filed Form T661 and Schedule 31
- 8% refundable credit on qualified Ontario expenditures (100% of current expenditures)
- C$3M expenditure limit shared with associated corporations; reduced when prior-year taxable income exceeds C$500k or capital reaches C$25M
- Claimed on Schedule 566 with the corporate return
Eligibility
- Where
- Canada
- Stages
- pre-seed, seed, series-a, growth
- Needs VC/accelerator backing
- No
- Needs partner referral code
- No
- Must be incorporated
- Yes
- AI focus required
- No
- Students / researchers
- Not eligible
- Nonprofits
- Not eligible
Also required
- Permanent establishment in Ontario
- SR&ED work performed in Ontario
How to apply
Claim with the corporate tax return: file Form T661 and federal Schedule 31, plus Ontario Schedule 566. Enter the credit on Schedule 5 line 468.
- Benefit
- cash
- Equity-free
- Yes
- Decision time
- —
- Credit validity
- —
- Deadline
- Rolling (claim with tax return)
- Status
- Open
Verified 2026-11-06 · source
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