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Manitoba Manufacturing Investment Tax Credit - is your business eligible? | CFIB

Written by admin | Mar 24, 2023 4:00:00 AM
Investments in Manitoba’s manufacturing and processing sectors have been supported since 1992 by the Manufacturing Investment Tax Credit. This program's expiry date was regularly extended over the years, but the Manitoba budget of 2020 made it a permanent measure to encourage purchases of new plants and equipment. The credit reduces the amount of Manitoba corporate income tax payable. 
 

Who can participate?

Qualifying businesses include those that are:

  • Incorporated
  • Primarily engaged in manufacturing, according to the definition of manufacturing in the Income Tax Act (Canada).
  • Sell or lease their products to a lessee who is also primarily involved in manufacturing

Which capital investments are eligible?

To qualify for the tax credit:

  • Investments in qualified property (buildings, machinery and equipment) must be made after March 11, 1992.
  • Qualified property must be used directly in manufacturing.
  • If the business has been leasing qualified property, and exercises an option to purchase it after March 8, 2005, the ‘used’ qualified property would be eligible.
Eligible Investments Date Acquired
   
New building After March 11, 1992
New addition to building After March 11, 1992
Used building After March 9, 2005
New equipment & machinery After March 11, 1992
New Class 43.1 equipment* After April 22, 2003
Used equipment & machinery After March 9, 2005

 *As per the federal Income Tax Regulations (Part XI), Class 43.1 includes (for a firm’s own consumption) equipment used to produce energy from renewable sources and equipment that uses energy more efficiently. Class 43.2 assets (previously classified as 43.1) will continue to qualify for the credit.

Corporations earn a tax credit, which can be applied against Manitoba corporate income tax payable in the year earned. Unused credits are available for a ten-year carry-forward and a three-year carry-back (to taxation years ending after March 11, 1992, or after April 22, 2003, for Class 43.1 property).

This credit is 80% refundable and 20% non-refundable for qualified property acquired after June 30, 2013. For property acquired earlier it is 70% refundable and 30% non-refundable.

How do you claim the credit?

The Canada Revenue Agency (CRA) administers this credit on behalf of the province. To learn more:

 
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