Ontario Made Manufacturing Investment Tax Credit

Definition

The Ontario Made Manufacturing Investment Tax Credit (OMMITC) is a refundable corporate tax credit that supports capital investment in manufacturing and processing activities carried on in Ontario. Introduced in the 2023 Ontario Budget and enacted in the Taxation Act, 2007 (Ontario), the credit equals 10% of qualifying investments, with an annual cap of $2 million per CCPC (or associated group), producing a maximum refund of $200,000 per year. It is claimed on Schedule 572 of the T2 return. The credit is intended to complement the federal reduced M&P rate and accelerated CCA for manufacturing assets.

Key rules

• The credit rate is 10% of qualifying expenditures, refundable regardless of tax payable.
• Qualifying corporations must be CCPCs throughout the tax year with a permanent establishment in Ontario and must carry on manufacturing and processing activities in the province.
• Qualifying expenditures include: the cost of an eligible building (Class 1 Manufacturing and Processing, Class 1 MBC), machinery and equipment included in Class 53 (acquired before 2026) or Class 43 (after 2025, confirm current Ontario rules for the post-2025 transition), used primarily (more than 50%) for M&P in Ontario.
• The annual expenditure limit is $20 million, generating a maximum $2 million credit per associated group.
• Assets must be available for use (ITA 13(27)) in the tax year to qualify. The half-year rule of federal CCA does not change the OMMITC base, which is the full capital cost.

Example

A London, Ontario CCPC that manufactures auto parts buys $1.2 million of CNC milling machinery (Class 53) and builds a $3 million M&P addition to its factory (Class 1 MBC at 10%) in 2026. Total qualifying expenditures are $4.2 million, well under the $20 million cap. The OMMITC equals $4.2 million × 10% = $420,000, refundable. This is in addition to federal CCA (Class 53 at 50% declining balance, or accelerated under AIIP rules), the Ontario 10% M&P tax rate, and any federal M&P recovery.

Common mistakes

• Claiming OMMITC on assets used primarily outside Ontario. Only assets used more than 50% for M&P in the province qualify.
• Including Class 8 or Class 10 assets. The credit is limited to specified manufacturing classes (Class 1 MBC, Class 53 or its successor class).
• Forgetting that associated corporations share the $20 million expenditure cap. Large corporate groups must allocate the limit on Schedule 572.
• Not adjusting the CCA capital cost base. Like federal ITCs, the OMMITC reduces the UCC of the class under ITA 13(7.1) in the year following the credit claim.

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