Assistance for Startups to Claim
the SR&ED Tax Credit.
What is the SR&ED Tax credit?
The Canadian Scientific Research and Experimental Development Tax Incentive Program(SRED or SR&ED) provides support in the form of tax credits and/or refunds, to corporations, partnerships or individuals who conduct scientific research or experimental development in Canada.
- Development of new software
- Tests of new concepts, recipes and technologies
- Prototype and model development
- Development of new and/or improved products or formulas
- Updating and streamlining to improve a process
What are the Benefits of the SR&ED Tax Credit?
The SR&ED tax credit benefits businesses by offsetting some of the payroll expenses involved in advancements and experimentation. Society benefits by freeing up companies, like yours, to take additional risks to improve systems and products we use everyday. Other benefits include:
- $250,000 each year for up to five years
- Unused credit can be carried forward up to 20 years
- Increased cash flow
- Increased return on Investment
- Lower your effective tax rate
- Use funds to offset Federal Income Tax
- Some provinces have their own R&D programs for tax credit
- Increased earnings per share
- Reduction of federal and/or province tax liability
Who qualifies for the SR&ED Tax Credit?
To qualify for the SR&ED tax credit, there are four basic criteria (also called a “four-part test”). All research must be completed in the Canada and receipts must be from within the past five years. Here are some of the ways we help our clients navigate the credit:
- Credit calculation
- Determining valid expenses
- Financial advice for future SR&ED
- Determining eligibility
- Filing your company tax return