SR&ED (Scientific Research and Experimental Development Tax Incentive Program) – Canada Revenue Agency (2022)
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.
Eligibility:
Applicants must be:
Documentation Needed:
Applicants must:
When It Ends:
Ongoing
Deadline:
Rolling deadline