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Scientific Research and Experimental Development (SR&ED) Program | Canada Revenue Agency (CRA)

Value

Varies.

Description

The Scientific Research and Experimental Development (SR&ED) Program is a federal tax incentive program designed to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada.

Eligible Applicants

  • Canadian-controlled private corporations
    • Generally, a Canadian-controlled private corporation (CCPC) can earn a refundable ITC at the enhanced rate of 35% on qualified SR&ED expenditures, up to a maximum threshold of $3 million. This 35% ITC is 100% refundable on qualified SR&ED expenditures and 40% refundable on qualified SR&ED capital expenditures incurred before 2014
    • A CCPC can also earn a non-refundable ITC at the basic rate of 15% on an amount over the $3 million threshold
    • A CCPC that meets the definition of a qualifying corporation can earn a refundable ITC at the basic rate of 15% on an amount over the $3 million threshold, of which 40% can be refunded
  • Other corporations
    • Other corporations can earn a non-refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. The ITC can be applied to reduce tax payable
  • Individuals and trusts
    • Individuals (proprietorships) and trusts can earn a refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. The ITC must be applied against tax payable and the remaining ITC can be refunded, up to a maximum of 40%
  • Members of a partnership
    • Since a partnership is not a taxpayer, it cannot earn an ITC. In general, the ITC is calculated at the partnership level then allocated to eligible members (individuals, corporations, or trusts), but not necessarily to all members. If you are considering submitting a partnership claim for SR&ED, we encourage you to read the SR&ED Claims for Partnerships Policy

Eligible Expenses

  • SR&ED salary or wages
  • Expenditures for materials for SR&ED
  • Contract Expenditures for SR&ED Performed on Behalf of a Claimant (policy)
  • SR&ED Lease Expenditures (policy), if the expenditure was made before 2014
  • SR&ED overhead and other expenditures (traditional method only)
  • Third-party payments
  • SR&ED capital expenditures, for property acquired and available for use prior to 2014

Deadline Date

  Ongoing

Contact

Contact Name: Canada Revenue Agency

Phone Number: 1‑800‑959‑5525

Website: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/clmng/clmngsrd-eng.html

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