Monday, December 21, 2015

How Small Businesses Can Utilize R&D Tax Credits in Vancouver

What are research and development tax credits, and does your business qualify for these tax credits? The scientific and experimental development tax credit, otherwise known as SR&ED tax credit, is a helpful program that will reward qualifying businesses who conduct research and development by September 1st, 2017.

Will This SR&ED Tax Credit Really Make A Difference?
How substantial is this tax credit for your company? The benefits are vast with the SR&ED program. Businesses that qualify and that are completely Canadian controlled (otherwise known as CCPCs) can claim a refundable tax credit of 10%! You may claim the 10% on either your businesses qualified SR&ED expenditures for the tax year it was conducted, or the expenditure limit (usually around $3 million), as outlined in the federal Income Tax Act.

Non-refundable Tax Credits for SR&ED
Non-refundable tax credits are also available for expenditures that exceeds the expenditure limit. These non-refundable credits are also helpful to corporations that are not necessarily eligible for the refundable credit. If you are CCPCs and are not eligible for the refundable SR&ED tax credit, inquire about the non-refundable tax credits available.

The non-refundable tax credit is calculated per the tax year and is 10% of the companies SR&ED eligible expenditure for the tax year that is either less the amount of it’s refundable credit for the given year, or any amount renounced for that tax year.

How Do I Claim My Credit?
You can claim your tax credits with the SR&ED program by completing a SR&ED tax credit form (T666) and submitting the form to your T2  Corporation Income Tax Return, In the form, you can enter the amount of non-refundable tax credits online 659 and the refundable credit on 674 of Schedule 5.

Do you need any help understanding, applying, or requesting SR&ED tax credits? Visit us as today for more information or call us at 604-259-9937