Tax Credits for Research and Development Available in Canada

In Canada, tax credit support is available from the federal government and from a number of provinces.

The Federal Program:

The Investment Tax Credit for Scientific Research and Experimental Development (ITC-SRED)

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Canadian Controlled Private Corporations (CCPCs) are eligible for a refundable credit of 35 cents on the dollar for qualified expenditures. Other companies are eligible for a 20% non-refundable credit. Credits may be claimed for one prior year in addition to any current claims.

The SR&ED credit program is authorized under Section 248 of the tax law and is governed by Regulation 2900. In order to qualify, a company must show that the projects claimed involved one or more intended technological advances (regardless of whether they were actually achieved). The company must then also show that there was some degree of technological uncertainty involved in the effort to achieve the desired technical goals. Finally, evidence of experimentation and the application of a scientific method must be presented.

The SR&ED credit may be claimed on form T661. A new form T661 was recently released by the Canada Revenue Agency and applies to all fiscal years ending on or after January 1, 2012.  Although the purpose of T661 is the simplification of SR&ED filing, under the new procedures there are some changes that will require a deep understanding of the specific requirements in order to avoid the denial of your SR&ED claim.  

Taxpayers are now required to file form T661 using a limited number of words describing eligible activity in each relevant section.  The latest form also clarifies the definitions of a number of technical terms that are defined in a revised guide and a checklist of required information. We can help you through this process! We specialize in providing descriptive, accurate, and concise reports that clearly establish the eligibility of your qualified projects for SR&ED support.

Provincial Programs:

Several provinces offer supplemental support for R&D conducted locally. These programs change frequently.

So what can we do for you?

We can help you to navigate the complex rules involved with filing your T661, and help you to avoid problems in filing and defending your SR&ED claims.

Click Here to read about the services we can provide for you. We Have Significant Experience in Research Credit Issues for Companies Operating in Both the United States and Canada, and we can provide even more help with cross-border cost segregation issues!

To learn more, or to arrange for your FREE Consultation, Contact Us Now. Let us help you see whether you’ve got some money coming!