Ontario Creates – Ontario Computer Animation and Special Effects Tax Credit (2022)

ByMaurice January 11, 2022September 11, 2022

Description:

The Ontario Computer Animation and Special Effects Tax Credit is a refundable tax credit equal to 18% of the qualifying labor expenditures for eligible computer animation and special effects activities, incurred by a qualifying corporation in a tax year for an eligible production.

Comments on Funding:

Funding is 18% of the eligible Ontario labor expenditures. There is no cap on eligible Ontario labor expenditures.

The amount of the credit, net of any Ontario taxes owing, will be paid to the qualifying corporation. If the qualifying corporation does not owe any taxes, the full amount will be paid out.

When It Ends:

Ongoing

Deadline:

Rolling deadline

Eligibility:

The applicant must:

Be a Canadian corporation
Perform eligible computer animation and special effects activities for the eligible production at a permanent establishment in Ontario for the tax year
it is not “controlled directly or indirectly in any manner” (see link in Appendix 1) by one or more corporations that are exempt from tax under Part II of the Corporations Tax Act (Ontario), nor is it a labour-sponsored venture capital corporation as defined in the Income Tax Act (Canada).

The production must also have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit.

The OCASE Tax Credit legislation (Section 90 of the Taxation Act, 2007) and OCASE Tax Credit regulation (Regulation 37/09) take precedence over any provision of these Guidelines.

Applications Steps:

The applicant must:

Apply online to Ontario Creates for a certificate of eligibility. Only one certificate of eligibility is issued for all of the eligible productions for the tax year.

file the certificate of eligibility and a completed Schedule 554, Ontario Computer Animation and Special Effects Tax Credit, for each eligible production together with the tax return to Canada Revenue Agency in order to claim the Ontario computer animation and special effects tax credit.

Please note: there is an additional filing fee of $100 applied to applications for Certificates of Eligibility received more than 24 months after the year-end of the claim.

Documentation Needed:

Applicants must submit:

the certificate of eligibility issued by Ontario Creates;
the completed Schedule 554, Ontario Computer Animation and Special Effects Tax Credit, for each eligible production;
their T2 Corporation Income Tax Return for the year.

Other Things to Note:

OCASE is based on fiscal year. Applicant’s claim must be based on actual expenditures, not projections, so applicants should submit their claim after the close of their financial year when all eligible activities are completed and a DVD of the work done is available.
Ontario Creates does not impose a deadline for OCASE applications, but there are taxation deadlines that may preclude receiving a tax credit for your year. Please check in with the Canada Revenue Agency if you’re unsure whether you’re still eligible to file or amend your corporate tax return. (Canada Revenue Agency Film Services Unit: (416 973-3407)