1. Assess your project eligibility early!
Your business and project can be planned better if you can determine your SR&ED eligibility early. This can be key in maximizing your claim and expenditures.
You can determine potential labour, material, and contractor expenses ahead of time and maximize the claimed amount.
To determine this, follow the prompts listed at the end of this article. For any further questions, please contact EVAMAX.
2. Active Time Tracking
The key to an easy SR&ED claim for your business and your SR&ED consultant is efficient tracking.
Ensure you have an active log system in place. This can help track employee hours based on projects and phases.
This log will help you accurately claim up to 65% of salaries paid to employees for research and development related work.
Organization is important for your claim. SR&ED projects typically deal with complicated and highly technical work.
As a part of your SR&ED claim, you will be responsible for a detailed report discussing your project. To make this process simpler, remember to keep track of all documentation and notes involved.
You can take this a step further by organizing documents, plans, evidence by phases of your project.
If your project does not have phases, chronological organization can also be helpful.
4. Ask questions
The added benefit of working with EVAMAX as your SR&ED consultant is the support available to you throughout your claim process.
From preparation and determining eligibility, to helping you collect the required documentation to speedy tracking of your claim, EVAMAX is here for your business.
Keep reading for more information about SR&ED tax credits .
What is SR&ED?
- The SR&ED Tax Credit program stands for Scientific Research & Experimental Development Tax Credit program
- It is a federal tax incentive program funded in partnership with Canada Revenue Agency
- Businesses can use SR&ED credits to fund research and development projects
- These projects can be used to create new or improve existing products
- This innovation extends to products, processes, principles, methods, or materials
- Tax credits are refunded at the end of a business’ fiscal year according to the project
Who can claim SR&ED Tax Credits?
- A Canadian proprietorship, partnership or corporation conducting R&D is eligible
- In order to qualify, your project must involve the three following criteria:
- Technological advancement
- Technical Content
- Technological Uncertainty
- You can use the following prompts to determine your eligibility
- Does your project involve new formulations, designs and innovations?
- Do your methods make products cheaper, faster, better, or more durable?
- Does it propose enhancements, efficiency, or new product development?
- Does it address material changes, inconsistent product, or quality issues?
- Does it reduce the labour and resources required in production?
Which expenditures can be claimed under SR&ED?
For Canadian-controlled private corporations and small and medium sized enterprises, the following can be claimed:
- Up to 65% of salaries for employees involved in the SR&ED project
- Up to 32% of sub-contractor expenses related to the SR&ED project
- Up to 42% of material expenses incurred for the SR&ED project
For Non-CCPC and Large CCPCs:
- Up to 36% of salaries for employees involved in the SR&ED project
- Up to 18% of sub-contractor expenses related to the SR&ED project
- Up to 24% of material expenses incurred for the SR&ED project
You can have your qualifying expenditures refunded to you in as little as 3 months after filing!