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What is SR&ED?

How do I qualify?

What do I need to qualify?

  1. SR&ED is not only for the science buffs. You can claim SR&ED for many different research and development costs.

  2. SR&ED eligible expenses that can be claimed are typically SR&ED wages, contractors and materials that are consumed or transformed within the research. 

  3. Provinces in Canada also have different tax credits that can be utilized in coordination with SR&ED at the federal level. This can lead to up to 60% of your research costs refunded back to your company at the end of each fiscal year.

  4. Time and evidence tracking could make or break your claim. It isn’t a first priority for any regular business owner. CRA looks for more activity-based time tracking methods.

What is the Science, Research, & Experimental Development Program (SR&ED)?

Science Research and Experimental Development (SR&ED) pronounced (SHRED) is a federal tax incentive program in Canada. The Canadian government supports innovation in Canada by providing a tax incentive for innovative work performed in Canada. Research and Development work in Canada does not guarantee SR&ED eligibility as CRA has their own guidelines in relation to what constitutes SR&ED work. SR&ED is claimed at the end of each fiscal year and is administered by CRA.

As defined by CRA, this means there is a systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is: 

(a) basic research

(b) applied research 

(c) experimental development

The method to establish this involves answering the following questions:

  1. Was there a scientific or a technological uncertainty?

  2. Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?

  3. Was the overall approach adopted consistent with a systematic investigation or search, including formulating and testing the hypotheses by means of experiment or analysis?

  4. Was the overall approach undertaken for the purpose of achieving a scientific or a technological advancement?

  5. Was a record of the hypotheses tested and the results kept as the work progressed?

At Colum Consultants we can help you better understand if you meet the requirements for SR&ED as set out by CRA. 

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