- Best Practices
- Client Satisfaction
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- Product Development
- Tax Credits
What is SR&ED?
The Scientific Research and Experimental Development Program (SR&ED) is a federal tax incentive program designed to stimulate innovation through R&D in Canada.
How much money can I get back?
The tax credit amounts depend on your corporate ownership structure. Federal, refundable tax credits are available for Canadian-controlled private corporations (CCPCs) at a rate of 35%. Federal, non-refundable tax credits are available to foreign-owned, publicly traded sole proprietorships, and partnerships at a rate of 15%. Additional, provincial tax credits are available in many provinces.
What kinds of costs can I claim?
Companies can apply for SR&ED investment tax credits for qualifying expenditures such as salaries and wages, materials used in trials or prototypes, overhead, and contracts.
What kinds of work is eligible to claim? I don’t feel like we do R&D.
The SR&ED program isn’t limited to the pure research that occurs by people who wear white coats and work in labs. If your company, in developing or improving new products and processes, has to overcome technological challenges in a systematic way, you could be eligible to claim SR&ED. These challenges may arise out of limitations or constraints with current processes, systems, cycle time, integration or scalability, to name a few. If you can’t find a solution to these challenges in the public domain or using your current, internal knowledge base this is where your SR&ED could begin.
When do I have to file the claim?
SR&ED claims are due 18 months following your fiscal year end. For example, companies with a year end of December 31, 2013 must file their SR&ED claim by June 30, 2015. All required forms must be filed by this date in order to be considered for the credit and there are no exceptions. Claims filed within 6 months of the fiscal year end however, are processed faster by CRA.
What if I already receive some sort of government funding?
No problem. Many companies apply for and receive funding from other government sources. With careful planning, businesses can take advantage of available programs to maximize the funding they receive. RDP’s team of Grant and Tax Credit specialists can work with you to ensure that you maximize your overall return.
How do I apply?
Applying involves submitting SR&ED specified forms as part of your tax return or amended return. The claim itself consists of two parts: a technical description detailing your SR&ED projects and the related financial information for which you are claiming credits.