What if there's no taxable income?
For Qualified Canadian Controlled Private Corporations (CCPCs), SR&ED tax credits are refundable. In this case, even if the CCPC has no taxable income, it will receive the refund from the government. This can be a great way for start-up companies to finance new product development.
For non-CCPCs (such as trusts, partnerships, individuals, and foreign corporations), SR&ED tax credits are non-refundable. In this case, if the company has no taxable income, it will not receive the tax credits that year, but the credits can be carried forward.
Please also see How much money will I get back? Are the tax credits refundable? and Can ITC's earned for SR&ED be carried either back or forward? for more information.