The SR&ED tax credit program at both the Provincial and Federal level is intended to reward companies who do the following:
- Attempt to overcome a technical uncertainty;
- Attempt to advance technology while overcoming the uncertainty;
- Make sure that qualified personnel supervise this scientific process.
The program is not intended to only reward research in its pure form (e.g. basic research in a laboratory). SR&ED can include such efforts as attempting to solve manufacturing problems and developing new products and processes. The key is the attempt to advance technology.
Am I Eligible for SR&ED Tax Credits?To be eligible for a SR&ED tax credit, the claimant must be carrying on a business in Canada. The SR&ED activity must be related to that business and must be performed in Canada. Finally, the candidate must be entitled to use this SR&ED in its business.
If these basic requirements are met, the candidate’s activities must then be assessed to determine whether they qualify as SR&ED as defined in the Income Tax Act of Canada.
The Claiming ProcessThe SR&ED tax program application process requires the applicant to complete prescribed forms as part of its annual tax return filing for projects completed throughout the year, rather than as a request for funding to support upcoming projects.