Benefits for qualifying for SR&ED government credits There are three substantial benefits for qualifying in SR&ED expenditures. First being a full tax deduction in the year that such expenditures occurred, the ability to pool SR&ED expenditures (enables you to carry over deductions to the extent that they are not needed currently) and eligibility for appealing investment tax credits (ITCs), which can be refundable in cash.
The Federal government provides a refundable tax credit at a rate of up to 35%. These factors can be used to your benefit if you hold the opportunity to qualify.
Discuss the benefits of applying for SRED credits for your business with your accountant or contact us for a free consultation and a no commitment eligibility check (how much we estimate your SRED value to be).
Many competing Canadian businesses use various resources to their advantage, one of which is devoting significant resources to the scientific research and experimental development (SR&ED) of new products and processes. Some may wonder if they are eligible for government grants through SR&ED, but before getting into the nuts and bolts, it is important to get a clear understanding of what it is all about. This program is the largest source of Federal government endorsement for research and development in Canada. The CRA uses multiple questions and criterias to determine SR&ED eligibility.
Sorting through the documents that show how much was spent on SR&ED efforts can be difficult when you don’t know what you’re looking for. Our consultants look for the following records when claiming expenditure:
SR&ED salary or wages
Money spent on materials for SR&ED
Contract expenditures for SR&ED performed by a claimant
SR&ED lease expenditures
SR&ED overhead and other expenditures
Third-party payments
SR&ED capital expenditures
Not everyone is eligible for SR&ED incentives, it is appropriate to know who is not suitable such as; commercial production of a new or improved material, device, or product, or the commercial use of a new or improved process, quality control or routine testing of materials, development based solely on design or routine engineering practice, social science or humanities research, market research or sales promotion, style changes, prospecting, exploring, or drilling for (or producing) minerals, petroleum, or natural gas. Many of these incentives go unclaimed, why not use your SR&ED to your benefit and check to see if you are entitled for credits.