Ontario film and television tax credit
Changes to the Ontario film and television tax credit have been announced. See what's new for Ontario corporations.
As measures due to COVID-19, for productions for which eligible expenditures were incurred before March 15, 2020 (and not completed), Ontario temporarily extended by 24 months the following:
- the deadline for filing an application for certificate of completion
- the period for which eligible expenditures can be claimed before principal photography begins
- the period to have the film or television production shown in Ontario after the production is complete and commercially exploitable, as agreed in writing
The Ontario film and television tax credit is a refundable tax credit based on the qualifying labour expenditures incurred by a qualifying production company for eligible Ontario productions.
The corporation must be Canadian controlled.
If the eligible Ontario production is a first-time production, you can claim a credit equal to:
- 40% of the labour expenditures, for the first $240,000 for the production and 35% on the balance
- an additional 10% of the labour expenditures if the production is a regional Ontario production
Small first-time production
If the eligible Ontario production is a small first-time production, you can claim a credit equal to the lesser of:
- the labour expenditures;
- $20,000 if the production is a regional Ontario production or $15,000 if it is not a regional Ontario production. These amounts are reduced by any Ontario film and television tax credits previously received for the production.
The total labour expenditure for a small first-time production cannot be more than $50,000 at the time the production is completed.
Other than a first-time production
If the eligible Ontario production is other than a first-time production, you can claim a credit equal to:
- 35% of the labour expenditures
- an additional 10% of labour expenditures if the production is a regional Ontario production
The qualifying labour expenditures equal the corporation's Ontario labour expenditures less assistance reasonably related to these expenditures. Some exceptions apply: for example, effective March 14, 2017, assistance that is a payment from the 2015 Ontario Production Services and Computer Animation and Special Effects Transition Fund ("Transitional Grant") to a qualifying corporation is not considered government assistance. See Schedule 556 for more exceptions.
The qualifying labour expenditures are determined without reference to any equity investment held by a person prescribed under section 1106(10) of the federal regulations.
The Ontario labour expenditures are the sum of the salaries, wages, and remuneration paid, and reimbursements made to the parent company of eligible salaries and wages and remuneration, incurred in a tax year that are directly attributable to the eligible Ontario production, performed in Ontario and paid to certain persons or entities, within 60 days of the end of the tax year.
You cannot claim the Ontario film and television tax credit if you claim the Ontario production services tax credit for that same production for any tax year.
You can get a certificate of eligibility from Ontario Creates. To be eligible for the credit, a corporation must meet certain criteria, including all of the following:
- be a Canadian-controlled corporation throughout the tax year as determined under sections 26 to 28 of the Investment Canada Act
- have a permanent establishment in Ontario throughout the tax year
- be primarily engaged in the carrying on of a Canadian film or video production business through a permanent establishment in Canada in the tax year
- not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) or Part I of the federal Income Tax Act for the tax year
- not be controlled, at any time in the tax year, directly or indirectly, in any way, by one or more persons, all or part of whose taxable income was exempt from tax under Part I of the federal Income Tax Act
- not be a prescribed labour-sponsored venture capital corporation at any time in the tax year
Claiming the credit
Before claiming the credit, you must apply online to Ontario Creates for a certificate of eligibility. If the production is eligible, Ontario Creates will issue a certificate indicating the estimated amount of the tax credit.
To claim the credit, file the following with your T2 Corporation Income Tax Return for the year for each eligible production:
- a certificate of eligibility (or copy) issued by Ontario Creates
- a completed Schedule 556, Ontario Film and Television Tax Credit
If you file your return electronically, see T2 Attach-a-Doc.
If you file a paper return, send the return and required attachments to your tax centre.
On line 458 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the total amount of the credit you are claiming.
The CRA will not begin to process the media tax credit claim until it receives all of the required documentation. A claim is considered to be complete when all of the above documentation is filed with the CRA.
For more information, see Schedule 556, section 91 of the Taxation Act, 2007 (Ontario), and After you file your claim for Ontario refundable media tax credits.
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