Comments on Funding:
Funding is a non-refundable tax credit based on eligible expenditures incurred by a corporation in a tax year. The ORDTC rate is:
- 4.5% for tax years that end before June 1, 2016;
- 3.5% for tax years that start after May 31, 2016;
- prorated for a tax year that ends on or after June 1, 2016, and includes May 31, 2016.
Eligible expenditures are reduced by government and non-government assistance, but not the ORDTC or the federal SR&ED ITC. The ORDTC will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.
Corporations may claim the tax credit on Schedule 508 and file it with their T2 corporation income tax return.
Carry back 3 years to reduce Ontario corporate income tax payable, but not to a tax year that ends before January 1, 2009. Carry forward 20 years.
Other Things to Note:
The ORDTC is administered by the Canada Revenue Agency after December 31, 2008.