What are research and development tax credits, and does your business qualify for these tax credits? The scientific and experimental development tax credit, otherwise known as SR&ED tax credit, is a helpful program that will reward qualifying businesses who conduct research and development by September 1st, 2017.
Will This SR&ED Tax Credit Really Make A Difference?
How substantial is this tax credit for your company? The benefits are vast with the SR&ED program. Businesses that qualify and that are completely Canadian controlled (otherwise known as CCPCs) can claim a refundable tax credit of 10%! You may claim the 10% on either your businesses qualified SR&ED expenditures for the tax year it was conducted, or the expenditure limit (usually around $3 million), as outlined in the federal Income Tax Act.
Non-refundable Tax Credits for SR&ED
Non-refundable tax credits are also available for expenditures that exceeds the expenditure limit. These non-refundable credits are also helpful to corporations that are not necessarily eligible for the refundable credit. If you are CCPCs and are not eligible for the refundable SR&ED tax credit, inquire about the non-refundable tax credits available.
The non-refundable tax credit is calculated per the tax year and is 10% of the companies SR&ED eligible expenditure for the tax year that is either less the amount of it’s refundable credit for the given year, or any amount renounced for that tax year.
How Do I Claim My Credit?
You can claim your tax credits with the SR&ED program by completing a SR&ED tax credit form (T666) and submitting the form to your T2 Corporation Income Tax Return, In the form, you can enter the amount of non-refundable tax credits online 659 and the refundable credit on 674 of Schedule 5.
Do you need any help understanding, applying, or requesting SR&ED tax credits? Visit us as https://innotek.ca/ today for more information or call us at 604-259-9937
