Important Information About the SR&ED Program by sredonecompany


More Info
									Important Information
    About the SR&ED
What Is It?

SR&ED stands for Scientific Research and
Experimental Development.

The SR&ED program is a tax incentive program
available to Canadian businesses that are involved
in research and development.
How Much Is Available?
Each year, the SR&ED program
provides over $4 billion to
Canadian businesses and
organizations in the form of
investment tax credits.

Approximately 75 percent of
the organizations that apply
for the credit are small
businesses, and countless
businesses that are eligible for
the program don’t even bother
Who Qualifies?

            Basically, any business or
            organization that conducts
            R&D inside Canada may
            qualify for the program.

            However, not every action
            that seems like R&D is
            actually SR&ED. The
            Canada Income Tax Act
            outlines what types of
            research qualify and what
            types don’t make the cut.
These Are Considered SR&ED

   Basic research that’s designed to advance scientific
    knowledge without a specific practical application.

   Experimental development that’s designed to achieve
    technological advancement by creating materials, products
    and processes.

   Applied research that’s designed to advance scientific
    knowledge and does have a specific practical application.
More SR&ED Qualified Work

Support work or research that falls into one of
the following categories may also qualify:

    Mathematical Analysis
    Operations Research
    Design
    Engineering
    Data Collection
    Testing
    Computer Programming
    Psychological Research
These Are Not Considered SR&ED

    Basic quality control.
    Routine material, product, device and process
    Standard market research or sales promotion.
    Social science research.
    Basic data collection.
    Commercial production or use of new or improved
     devices, materials, products or processes.
    Drilling, exploring or prospecting for natural gas,
     petroleum or minerals.
The Reason for the Program
    The Canada Revenue
     Agency (CRA) created
     the program to act as
     an incentive for
     different businesses to
     conduct meaningful
     research and
    The hope is for
     Canadian businesses to
     be at the forefront of
     advances in many
     different industries.
How to Apply

 To apply for the SR&ED tax credit, you
 must send in the appropriate forms with
 your income tax return. First, you need
 form T661, then for a corporation, you
 also need to send a T2SCH31. For
 individuals the extra form is T2038.

 Starting from the end of the tax year that the
 expenses were incurred, corporations have 18
 months to file and individuals have 17.5
Expenditures to Include

 If your specific research meets the criteria, you can include
 the following expenditures.
  Materials
  Contracts
  Salaries and wages
  Overhead
  Leasing equipment expenses
  Capital expenditures
  Third-party payments

 Claims are usually processed between 120 and 365 days after they
 are received by the CRA.
Additional Info.
    When filing a claim for SR&ED credit, sending the
     following information may help speed up the
    Financial or technical documents that pertain to
     the claim.
    Contact information of a technical person and
     financial person in the organization that’s familiar
     with the research and expenditures.
    It’s also wise to respond as fast as possible to any
     requests for more information.
SR&ED One Canada is an economics development
program that offers support to businesses that
have a problems to solve. Visit us today at to learn more.

Further Information…

To top