by Shawn Rosenzweig, CA

I’d like to spread the word about one of Ontario’s best-kept tax secrets: 

Ontario's transitional tax credit.

Many corporations have already taken advantage of Ontario’s Scientific Research &Experimental Development (SR&ED) program, but, there is an added bonus of this program that is often overlooked. 

Companies that have filed a SR&ED claim in 2008 may now be eligible to receive an additional Ontario refund known as a ‘Transitional Credit.’ This credit became available to companies as a result of the harmonization between the Ontario and Federal corporate tax returns in 2009, yet most companies are unaware that they may be eligible.

 SBLR has been very active in helping our clients file for this one-time tax credit.  In fact, we’ve helped a number of our clients receive refunds – that can be applied, dollar for dollar against taxes payable - ranging from $10,000 up to $150,000.  As an additional benefit, Ontario allows companies to adjust corporate tax returns up to four years after filing, so it’s not too late to obtain the transitional tax credit for your company, as well.

There are four criteria companies must meet in order to maximize the refund for this one-time transitional credit:

• A SR&ED claim filed in 2008
• Investment Tax Credits (ITCs) earned in 2008 or previous years
• Ontario taxes paid in 2009-2010
• Expectations of profitability in the next three years

This transitional tax credit is a hidden asset for many companies that can add significantly to cash flow.I have consulted with many new clients who simply werenot aware that they were eligible for this credit, which can mean up to a six-figure refund for their company. Now’s the time to inquire; you may be pleasantly surprised to discover that the transitional credit is available to you, as well.

About SBLR LLP Chartered Accountants (SBLR):

With eight partners and a support team of over forty people, SBLR provideshigh-impact strategic tax planning, business advisory and assuranceaccounting services to small- and mid-sized privately owned companies.SBLR's approach to servicing clients is based onproactive communications, analysis and no-nonsense strategic advice toassist them in reaching their full potential as entrepreneurs.

For more information on Shawn Rosenzweig, please continue to the SBLR website.