Schedule 502 is applicable for corporations that earned income attributable to Ontario in the year and had eligible Canadian profits from manufacturing and processing, farming, fishing, mining, logging, or from generating or producing electrical energy or steam.
Because federal and provincial notions are different, a question has been added at the bottom of Section 1 to indicate whether the corporation is a small manufacturing business. To meet the eligibility criteria, the adjusted income threshold is of $250,000 instead of $200,000 and income from an active business resulting from manufacturing and processing activities includes farming, fishing, logging or mining.
The corporation’s income from farming, fishing or logging must be reported in Section 3 and the corporation’s income from mining must be reported in Section 4. These incomes are not taken into account when calculating the federal credit in Schedule 27, Calculation of Canadian Manufacturing and Processing Profits Deduction (Jump Code: 27).
Schedule 502 can be used separately from the corporation’s eligibility to the federal deduction for the Canadian manufacturing and processing profits, as long as the Ontario eligibility criteria are respected.