Schedule 508, Ontario Research and Development Tax Credit
Calculation of lines 240 to 243
To calculate the number of days in the taxation year before June 1, 2016, and after May 31, 2016, the program verifies if the corporation’s current taxation year straddles June 1, 2016. If the current taxation year does not straddle June 1, 2016, the program verifies if a prior taxation year straddles June 1, 2016, in the “History of taxation years” section in Schedule 4N, Non-Capital Loss Continuity Workchart (Jump Code: 4N).
The part entitled “Summary and analysis of credit” allows you to follow up on the credits that can be carried forward to a subsequent taxation year over a period of 20 years.
The part entitled “Schedule A - Worksheet for eligible expenditures incurred by the corporation in Ontario for the current taxation year” allows you to adjust the expenditures reported in Form T661, Scientific Research and Experimental Development (SR&DE) Expenditures Claim (Jump Code: 661) according to their eligibility to the ORDTC. Data entered in Schedule A will also be used, with the necessary adjustments, for the purpose of calculating Schedule 566, Ontario Innovation Tax Credit (Jump Code: 566).
Line 105, Government assistance, non-government assistance or contract payment for eligible expenditures
The program automatically carries to line Ontario Innovation Tax Credit (OITC) the Ontario innovation tax credit amount calculated using data from line 513b of Form T661.
Any other amount of assistance received for eligible expenditures must be entered manually on line Other government assistance, non-government assistance or contract payment. According to the definition under section 38 of the Taxation Act, 2007 (Ontario), the terms “government assistance,” “non government assistance” and “contract payment” are defined in section 127 of the federal Act without taking the ORDTC into account (according to Schedule 508). Data on lines 513, 515, 517 and/or 538 of Form T661 can be used to calculate the amount on line 105, with the necessary adjustments.
Note that Form T661 must be filed within the appropriate time limit to allow the ORDTC to be claimed.
The ORDTC will be carried forward to line 416 of Schedule 5, Tax Calculation Supplementary – Corporations (Jump Code: 5) while recapture of the ORDTC will be carried forward to line 277 of this schedule.
See Also