SRED Tax Credit Changes

Federal SRED Legislative Changes

There have been a number of changes to the SR&ED program as it relates to tax credit amounts. These changes were first introduced in 2012, and have recently come into effect under Bill C-43. The new changes in the program aim to focus the tax credits solely at the project, rather than capital expenditures.

Announced changes include:

Capital expenses no longer will qualify towards SRED tax credits
The overhead SRED expenditure rate through the proxy method of claiming will be reduced from 65% to 55% over two years.
Third-parties and contracts towards SRED expenditures will only be eligible for a total tax credit of 80%.
The 20% credit for SRED expenditures will be reduced to 15%

Read The Full Legislation

There are a number of other changes to the SR&ED program, and changes that will continue to be rolled out in the coming years. It’s important to read and understand the full legislation, or use a SR&ED consultant that will be able to give you the expert guidance needed to fully explore the SR&ED tax incentive program.

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