Ontario made manufacturing investment tax credit
For eligible investments made after May 14, 2025, and before 2030, a 15% refundable corporation income tax credit applies to eligible investments of up to $20 million in a tax year made by qualifying corporations, for a maximum credit of $3 million a year. Previously, the rate was 10% and the maximum credit was $2 million.
The $20 million limit is shared among an associated group of corporations and is prorated for short tax years.
For calculating this credit only, any regional opportunities investment tax credit and any amount calculated for this credit, which would otherwise be government assistance for calculating capital cost, is deemed NOT to be government assistance and does not reduce the capital cost.
Qualifying corporations:
- are Canadian-controlled private corporations (CCPCs) throughout the year or, for investments made after May 14, 2025, and before 2030, corporations other than CCPCs. In the latter situation, the credit is non-refundable and may be carried forward for up to 10 tax years
- are not exempt from tax for the year under the corporate tax provisions of the Ontario Taxation Act (2007)
- carry on business in Ontario during the year through a permanent establishment in Ontario. For this credit, a corporation will have a permanent establishment in a province if it has a fixed place of business of the corporation, including an office, a factory, or a workshop; and where it uses substantial machinery or equipment in a particular place at any time in a tax year
Eligible investments are expenditures for capital cost allowance (CCA) classes 1 and 53:
- class 1 for constructing, renovating, or acquiring buildings used for manufacturing or processing in Ontario. To qualify as a building used for manufacturing, 90% of the floor space of the building must be used at the end of the corporation's tax year for manufacturing or processing in Ontario and it must be eligible for the additional 6% CCA allowed under the federal Income Tax Act
- class 53 machinery and equipment used in the manufacturing or processing of goods in Ontario that are acquired before 2026. After 2025, eligible investments in machinery and equipment are capital expenditures for assets included in class 43(a) (class 43 except powered industrial lift truck and portable tool acquired for the purpose of rental income) that are used in the manufacturing or processing of goods for sale or lease. For information about manufacturing and processing, see Income Tax Folio S4-F15-C1, Manufacturing and Processing
Machinery and equipment expenditures may be incurred in the tax year immediately preceding the year the property becomes available for use.
The available-for-use rules differ between buildings and property other than buildings. For information about these rules, see Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance.
You cannot claim a credit for any expenditure that was incurred:
- under a contract with a person or partnership with which the corporation does not deal at arm's length at the time it was incurred
- by a predecessor corporation that was not a qualifying corporation in case of amalgamation
A corporation may have to make a repayment if it claims the credit for a tax year ending after May 14, 2025, for eligible capital property and the property is, within the five following years:
- disposed of
- converted or changed to a non-manufacturing or processing use
- removed from Ontario
This applies to dispositions, conversions, or removals after May 14, 2025.
Claiming the credit
File a completed Schedule 572, Ontario Made Manufacturing Investment Tax Credit, with your return.
For more information on the tax credit, see the schedule and sections 53.3 and 97.2 of the Taxation Act, 2007 (Ontario).
On Schedule 5, Tax Calculation Supplementary – Corporations, enter:
- on line 474, the amount of the refundable credit you are claiming
- on line 421, the amount of the non-refundable credit you are claiming
- on line 281, the amount of the repayment
Forms and publications
- Schedule 572, Ontario Made Manufacturing Investment Tax Credit
- Schedule 5, Tax Calculation Supplementary – Corporations
- Income Tax Folio S4-F15-C1, Manufacturing and Processing
- Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance
- IT-458 Canadian-Controlled Private Corporation
- IT-177 Permanent Establishment of a Corporation in a Province