Who Qualifies and How much are the Benefits?

Who Qualifies?

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Any taxpayer (individual, corporation or trust) that has a business in Canada can claim SR&ED but the tax credit / refund rate varies based on the type of organization. The largest benefits are given to Canadian-Controlled Private Corporations (CCPCs).

The federal government refunds up to 35% of eligible R&D costs for qualifying companies. The potential eligible expenses that can presently be claimed for SR&ED are: Salaries, Contractor Fees, Cost of Materials Consumed / Transformed, Leases and Capital Equipment. As of January 1st, 2014, some rules change and Leases / Capital Equipment can no longer be claimed.

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Provincial and territorial governments also provide supplemental tax credits for R&D which vary by province, corporate structure, taxable income, etc.

For example, Ontario provides an additional 10% refundable tax credit to qualified corporations as well as a 4.5% non-refundable tax credit to all corporations. For salaries, the eligible amount can be ‘grossed up’ (i.e., add 60%) due to overhead, which can effectively increase the amount recovered to just over 70% for a qualified CCPC.  In Quebec, the recovery amount for salaries can exceed 80% for CCPCs. As you can see, it is worthwhile to look into this program!!!

contact us to see if you are eligible

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25 Jarrow Crescent, Whitby, ON L1M 0G9
+1 905 665 5193