Ontario credit union tax reduction

The Ontario credit union tax reduction allows credit unions a special deduction from income tax otherwise payable. It is designed to reduce their overall income tax rate to the same net rate paid by small business corporations that claim the Ontario small business deduction.

To be eligible to claim the Ontario credit union tax reduction, the credit union must:

  • have been a credit union throughout the tax year
  • have had a permanent establishment in Ontario at any time in the tax year
  • have Ontario taxable income in the year

Claiming the credit

You can use Part 5 of Schedule 500, Ontario Corporation Tax Calculation, to calculate the Ontario credit union tax reduction. Schedule 500 is a worksheet and does not have to be filed with your return.

For more information on the credit, see the schedule and section 35 of the Taxation Act, 2007 (Ontario).

On line 410 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the credit you are claiming.

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