... tax back for your research

SR&ED FAQ

Here are a list of the questions currently answered in our FAQ. Have a question not addressed here? Send us an email.

General SR&ED Questions

  1. What is the SR&ED program?
  2. Why do governments offer SR&ED tax credits?
  3. How do Canada's SR&ED costs compare to those of other countries?
  4. How do I apply for SR&ED credits?
  5. Who can claim?
  6. What provincial incentives are available?
  7. Can't our own accountants prepare our SR&ED claim?
  8. How much time and work would be required from our staff to prepare a claim?
  9. Will this increase the chances of a total business audit?
  10. Will my competitors find out about my research & development?
  11. What advice can you give to new developments or start-up companies?

Technical Eligibility

  1. Does the work my company is doing count as SR&ED?
  2. What are my chances of approval?
  3. Who are classed as "qualified personnel"?
  4. What if my research was unsuccessful?
  5. Is my project eligible for SR&ED credits if a competitor already offers a similar product?
  6. What is the difference between experimental and commercial production?
  7. Can we claim the work done in clinical trials as SR&ED?

Tax Credits

  1. How much money will I get back? Are the tax credits refundable?
  2. What if there's no taxable income?
  3. Can ITC's earned for SR&ED be carried either back or forward?

Dates and Deadlines

  1. I just found out about this program. Can I claim SR&ED credits for work done in previous years?
  2. What if my SR&ED project spans fiscal years?
  3. How long do I have to make a claim?
  4. Is the 18 month deadline based on the number of days or the number of months after the end of the taxation year?
  5. How can I prove that the "prescribed information" was filed in time?
  6. When does an SR&ED claim need to be filed in order for the CRA to review and advise the claimant of any deficiencies in the claim?
  7. How long will it take to process my claim?
  8. My taxes are due, but I need a bit more time to complete my SR&ED claim. Should I file the claim now, and submit the SR&ED claim as an amendment, or delay the return, and submit both together?

Supporting Documents

  1. What if this is our first claim and we haven't kept formal R&D records?
  2. What are some tools available for identifying "existing standard practices"?
  3. What kind of additional technical supporting documents are required?
  4. What kind of financial supporting documents are required?
  5. Do we have to send in all our supporting documents with the SR&ED claim?
  6. Are "statements of work" required for subcontractors?

Payments to Universities

  1. What are the issues involved when hiring universities or research institutes to perform eligible "third party" research?
  2. What are the issues involved with payments to universities or other research institutes in Ontario?

Eligible Expenses

  1. What expenses are eligible?
  2. What capital expenses can be claimed?
  3. How does government funding received for a project affect my SR&ED claim?
  4. What employee benefits can be included in eligible "salary or wages" for SR&ED claims?
  5. What administrative salaries or wages can be claimed under the traditional method of calculating investment tax credits?
  6. Can retiring allowances be included in SR&ED claims?
  7. Are stock options exercised by an employee allowed as "salary or wages" for SR&ED claims?
  8. Foreign contractors in Canada - are these costs eligible to claim for SR&ED?
  9. Ensuring SR&ED eligibility- 'subcontractor' vs. 'royalty' agreements
  10. Can we claim SR&ED expenses that are unpaid within 180 days of year-end?
  11. What if we sell our prototype - what costs are eligible for SR&ED tax credits?
  12. Are payments to acquire rights (eg, royalty payments) ever eligible for SR&ED?
  13. Can water and energy sources be claimed as 'consumed materials'?
  14. Are salary & wages incurred outside of Canada eligible for SR&ED credits?
  15. Are farm producers eligible for SR&ED investment tax credits through Agricultural organizations?
  16. For SR&ED tax credit purposes, how far does "Canada" extend?

Corporate Structures

  1. What is a 'specified employee'? What are the restrictions on SR&ED labour inclusions and limits for specified employees?
  2. What are the SR&ED implications of "Associated" vs. "Related" vs. "Connected" corporations?
  3. What are "de facto" vs. "de jure" control?

After the Claim is Submitted

  1. What happens after I file a claim?
  2. What will the CRA typically look at during their review?
  3. Our claim was reduced or rejected - is there anything we can do?