SR&ED Program Details

How do Income Tax Credits (ITCs) Benefit Your Company?

  • a source of cash for R&D
  • added shareholder value
  • tax credits are valuable assets that can be carried back 3 years and forward 20
  • improve product marketing
  • a SR&ED expenditure pool can be carried forward indefinitely to be used when taxable income has increased

What Expenses Qualify?

  • labour
  • materials
  • contract payments
  • overhead costs (can be estimated)
  • third party payments (e.g. association or university general research contributions)
  • some lease costs for R&D equipment
  • some capital expenditures

How Will You be Paid?

CCPCs (Canadian-Controlled Private Corporations):

  • 100% of ITC earned on current expenditures is awarded as a cash refund
  • 40% of ITC earned on capital expenditures is awarded as a cash refund

Individuals and Partnerships:

  • 40% of ITC earned is awarded as a cash refund
  • 60% of ITC earned is credited towards taxes payable

Public Corporations:

  • 100% of ITC earned is credited towards taxes payable