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Is your company eligible for the Manitoba Manufacturing Investment Tax Credit?

woman at a textile plant sewing

Investments in Manitoba’s manufacturing sector have been supported since 1992 by the 10% Manufacturing Investment Tax Credit. This program targets new manufacturing plants and equipment purchased for first-time use in manufacturing and processing in Manitoba.

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 between March 11, 1992 and December 31, 2020.
  • 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 InvestmentsDate Acquired
  
New buildingMarch 11, 1992 – December 31, 2020
New addition to buildingMarch 11, 1992 – December 31, 2020
Used buildingMarch 9, 2005 – December 31, 2020
New equipment & machineryMarch 11, 1992 – December 31, 2020
New Class 43.1 equipment*April 22, 2003 – December 31, 2020
Used equipment & machineryMarch 9, 2005 – December 31, 2020

 *As per the federal Income Tax Regulations (Park 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 10% tax credit for eligible property acquired before April 11, 2017, or 9% tax credit for eligible property acquired after April 12, 2017. The credit 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).

The credit is partly refundable and partly non-refundable.

For property acquired before June 30, 2013, the credit is 7/10 refundable and 3/10 non-refundable. If acquired after June 30, 2013 and before April 12, 2017, the credit is 8/10 refundable and 2/10 non-refundable. And if acquired after April 12, 2017, the credit is 8/9 refundable and 1/9 refundable.

When the Manitoba PST falls from 8% to 7% on July 1, 2019, the refundable portion of this credit will decrease from 8% to 7%. The non-refundable portion remains 1%.

How do you claim the credit?

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