No Fixed Amount
Type of Program:
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. The eligible expenditures incurred for the SR&ED work performed in the year may include expenses for: salary and wages, materials, SR&ED contracts, overhead, third-party payment.
Comments on Funding:
Funding 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, you 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.
When It Ends:
Applicants must be:
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 Ontario to identify and maximize government grants to grow their business.
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