SR&ED FAQ
What is SR&ED?
Scientific Research and Experimental Development (SR&ED) is a Federal tax incentive program offered by the Canadian Government to assist companies invested in innovation. It seeks to stimulate experimentation and technological advancement for the benefit of the Canadian economy.
Who can apply?
All Canadian taxpayers who file a T1 or T2 tax return, and develop new products, or enhance/modify/improve existing products or technological processes can apply.
How do we know if we qualify?
Fill out our online SR&ED Eligibility Questionnaire to find out if you qualify.
What is the filing deadline for my claim?
SR&ED claims are due to CRA 18 months from the last day of your fiscal year end, which means that you can claim for previous fiscal years, as long as the claims for those years are filed within the 18-month period.
What expenditures can be claimed?
All expenditures related to R&D projects can be claimed. These include: wages, materials, new machinery and equipment used for SR&ED, leased equipment (if more than 90% was used for SR&ED), payments made to contractors to carry out SR&ED for the company, rental costs (excluding leases or rent) and overhead costs.
Which activities do not qualify?
Market research, sales promotion, quality control, routine data collection, Social Sciences and Humanities and Trade Shows.
How much can I claim?
Canadian taxpayers can claim up to 83% of their labour, depending on where they’re situated in Canada, size, ownership and taxable income.
What is the maximum I can claim?
There is no set limit on what a company can claim. All expenditures can be submitted as long as the work meets the 3 SR&ED Program criteria: Technological Uncertainty , Systematic Investigation and Technological Advancement.
How much of my time will it take?
R&D 2000 guarantees that your claim preparation will require no more than a few hours of your time. Our consultants are industry experts with Masters and/or Ph.D. degrees in specific fields of science and engineering. Their experience allows them to promptly identify eligible projects and their related costs.
How much will it cost?
We provide risk-free service: our fees are competitive and payable only after you receive your tax credit.
How long will it take to process my claim?
Generally, most claims are approved within 2 to 6 months. CRA commits to processing reimbursable claims that are filed with the year-end T2 within 4 months. Non-refundable claims are processed within 12 months, whereas amended refundable and non-refundable claims are processed between 8 to 12 months.
What can help speed up the receipt of my SR&ED reimbursable tax credit?
Making the Right Decision: choosing R&D 2000.
We don’t do R&D
You may not consider the work you do to be R&D, yet many everyday activities on the shop floor or in an industrial setting are potentially eligible. In addition, the work you do doesn’t necessarily have to represent a breakthrough in your industry. Small improvements and advancements in the development or formulation of your product or process can be sufficient.
We don’t have taxable income
That’s OK! Your company may still be eligible even if you are in a loss position and don’t pay income taxes.
Our work is not new in the industry
No problem — your eligible SR&ED work need only be new to your company. Other similar products and/or processes may already exist in the marketplace. As long as you encountered technological obstacles that could not be readily resolved using existing knowledge in the public realm, and you attempted to resolve these obstacles in a systematic manner, then you qualify for the SR&ED tax credit.
Our projects were unsuccessful
The success of your product and/or process is not a determining factor in the assessment of your claim. Failed, abandoned or postponed projects still qualify for the SR&ED tax credit. The lessons you learned and the expertise you acquired throughout your systematic investigation are considered technological advancements in an unsuccessful project.
