Benefits of SR&ED Tax Credits
Qualified Canadian Controlled Private Corporations (CCPC’s) can receive federally up to 35% back of eligible expenditures incurred in the development of new or improved products or processes. Foreign owned or public corporations can qualify for a 15% tax credit (this was changed from 20% to 15% in 2014) on eligible expenditures.
$88,908,312.76 & Counting, In Claimed Credits
Get Started & Claim Your Share
Most Canadian provinces offer additional tax credits on qualified SR&ED expenditures. Depending on the province, SR&ED claimants can earn additional provincial SR&ED tax credits. The funds that you receive from the SR&ED program can be invested back into your business in the form of new equipment, new hires, expanding your facilities, taking on more challenging projects, or paying down debts.
How SR&ED Tax Credits are Calculated
The following charts show the value of tax credits from an example set of expenditures:
| Example of SR&ED Expenditures | ||
| Calculation of Qualified SR&ED Expenditures | Expense | SR&ED Eligible |
| Labour/Wages (T4) | $90,000 | $90,000 |
| Overhead Proxy: 55% of Eligible Labour) | $49,500 | |
| Materials Destroyed + Transformed | $5,000 | $5,000 |
| Arms-length Subcontracts (80%) | $5,000 | $4,000 |
| Total Qualified Expenditures | $100,000 | $98,000 |
| Example of Calculating Tax Credit (CCPC)* | ||
| Return | ||
| SR&ED Expenditures | $98,000 | |
| Ontario – OITC (10%) | $9,800 | |
| Ontario – ORDTC (4.5%) | $3,969 | |
| Federal – ITC (35%) | $29,481 | |
| Total SR&ED Benefit For You (43.25%) | $43,250 | |
| * CCPC – Canadian Controlled Private Corporation | ||