Producing music in Ontario is expensive. Studio time, engineers, producers, and musicians all add up quickly. The Ontario Sound Recording Tax Credit (OSRTC) helps by refunding part of your eligible production expenses through Ontario’s corporate tax system. This is a refundable tax credit, so you can get cash back even if your company does not owe corporate tax.
This guide explains how to apply for the Ontario Sound Recording Tax Credit, who qualifies, what expenses count, and what to prepare before you file.
The Ontario Sound Recording Tax Credit is a refundable Ontario corporate tax credit for sound recording production. It supports Ontario-based music companies that create master recordings.
Because the credit is refundable, you could receive a cash refund, not just a reduction in tax payable.
To apply, your business must meet all core eligibility requirements.
Your company must:
Sole proprietors and partnerships are not eligible. Only corporations can apply.
The sound recording must:
Some genres, like spoken word or jingles, may not qualify. Check the guidelines before you claim.
Only certain costs qualify for the Ontario Sound Recording Tax Credit.
Examples include:
Examples include:
Marketing, distribution, and live performance costs are not eligible.
You do not apply through a separate grant portal. The Ontario Sound Recording Tax Credit is claimed through your corporate tax filing.
Finish your sound recording project
You must incur all costs before claiming the credit.
Track eligible expenses
Separate Ontario labour from non-labour costs. Keep contracts, invoices, and proof of payment.
File your Ontario T2 corporate tax return
Claim the credit as part of your annual filing with the Canada Revenue Agency (CRA), on behalf of Ontario.
Submit OSRTC schedules and certificates
These forms show your eligible expenses and calculate your refundable credit.
Wait for your refund
If approved, you get the credit even if your corporation owes no tax.
If you’re unsure about your eligibility, tools like GrantHub’s matcher can help you check if your corporation and project activities fit the program rules before you file.
Claiming ineligible expenses
Marketing, touring, and promotion costs are often claimed by mistake.
Not owning the master recording
If your company does not control the copyright, your claim may be denied.
Poor record keeping
Missing contracts or invoices can slow down or reduce your refund.
Assuming individuals can apply
Only corporations qualify for the Ontario Sound Recording Tax Credit.
Q: Is the Ontario Sound Recording Tax Credit refundable?
Yes. The OSRTC is a refundable corporate tax credit, so you can receive a cash refund even if your company has no tax payable.
Q: Can I combine the OSRTC with music grants?
Yes. The OSRTC can be used alongside provincial or federal music grants. However, government assistance may reduce your eligible expenses. Always track your funding sources carefully. For help finding compatible grants, GrantHub’s database lists music funding programs that can be used with tax credits.
Q: Do I need to apply before recording starts?
No. The credit is claimed after you finish your project and have incurred expenses, through your corporate tax return.
Q: Are independent artists eligible?
Only if the artist has an eligible Ontario-based corporation that owns the master recording.
Q: How long does it take to receive the refund?
Processing times vary, but refunds are issued after your T2 return and all schedules are reviewed.
The Ontario Sound Recording Tax Credit can refund a significant part of your recording costs. But you must follow the rules for both your corporation and your expenses. GrantHub tracks active tax credits and grant programs across Canada, including music and media funding. Checking which programs fit your business early will help you plan your projects with funding in mind. If you want to stay updated on new tax credits or grants, consider signing up for GrantHub’s newsletter.
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