Scientific Research and Experimental Development Tax Incentive Program (SR&ED)

Amount:

no fixed amount

Type:

Tax Credit

Description:

The Scientific Research and Experimental Development (SR&ED) program uses tax incentives to encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada.

Comments on Funding:

These tax incentives come in three forms: an income tax deduction, an investment tax credit (ITC), and, in certain circumstances, a refund.
The SR&ED investment tax credit (ITC) ranges from 15% to 35% of the applicant’s qualified SR&ED expenditures.
Canadian-controlled private corporations (CCPC), generally, can earn a refundable ITC (investment tax credit) at the enhanced rate of 35% on qualified SR&ED expenditures of $3 million. They can also earn a non-refundable ITC at the basic rate of 15% on an amount over $3 million. However, if the applicant is a CCPC that also meets the definition of a qualifying corporation, it also earn a refundable ITC at the basic rate of 15% on an amount over $3 million and 40% of the ITC can be refunded.
Other corporations can earn a non-refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. They can use the ITC to reduce tax payable.
Individuals (proprietorships) and trusts can earn a refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. They first must apply the ITC against tax payable before the Canada Revenue Agency can refund 40% of the unclaimed balance of ITCs earned in the year.

Deadline:

Rolling deadline

Eligibility:

Applicants must be:
1. Canadian-controlled private corporations, 2. other corporations,
3. individuals (proprietorships) and trusts, 4. members of a partnership,
5. doing research and development conducted, for the most part, in Canada and must be either basic research, applied research or experimental development.

Application Steps:

Applicants must contact CRA through the website

Documentation Needed:

No specific documentation has been identified.

Other Things to Note:

Link Guide:

Maurice

About the author

Maurice

Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Canada to identify and maximize funding to grow their business.

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