Dealing with technology? You might be eligible for government funding

SR&ED (Scientific Research & Experimental Development) is an incentive program by the Canadian government that refunds companies involved in Research and Development (R&D). (See the information about the program on the CRA website.) Canadian companies that spend money on creating or modifying products or processes through experimenting are eligible for SR&ED. Any company that deals with technology (software and hardware development, machinery, printing etc.) may qualify. If you created an entirely new industrial process or improved an existing one, if you took a database driver and rewrote it so its performance doubled, if you came up with a fuzzy logic algorithm to facilitate scheduling - all of this may be eligible. Innovation, uncertainties you overcame, and technological advancement are the criteria for eligibility. Even failed experiments may qualify. Non-Canadian owned companies also qualify, if they pay salary in Canada.
The SR&ED program is available to companies involved in Research and Development (R&D). Eligible expenditures include your time, employee and subcontractors labour, materials and equipment. SR&ED money is given as a refund for work already done.
Read more about SRED

Dealing with technology? You might be eligible for government funding

What is SR&ED?
SR&ED (Scientific Research & Experimental Development) is an incentive program by the Canadian government that refunds companies involved in Research and Development (R&D). (See the information about the program on the CRA website.)

Who is eligible for SR&ED?

Canadian-controlled private corporations (CCPC) that spend money on creating or modifying products or processes through experimenting. Any company that deals with technology (software and hardware development, machinery, printing etc.) may qualify. If you created an entirely new industrial process or improved an existing one, if you took a database driver and rewrote it so its performance doubled, if you came up with a fuzzy logic algorithm to facilitate scheduling - all of this may be eligible.

Innovation, uncertainties you overcame, and technological advancement are the criteria for eligibility.

Even failed experiments may qualify.

Non-Canadian owned companies also qualify, if they pay salary in Canada. Canadian public companies and non-incorporated entities are eligible too, but they are entitled to smaller refunds.
The SR&ED program is available to companies involved in Research and Development (R&D). Eligible expenditures include your time, employees' labour, materials and equipment. SR&ED money is given as a refund for work already done.
If you are interested in government incentives for current or future work, have a look at this list: Other Canadian government financial incentives for businesses
If you are interested in Ontario Digital Media tax credit (OIDMTC), go here: OIDMTC.


Amounts and deadlines

The refund is calculated based on the amount of salary paid in the fiscal year related to the qualified project.



Maximum refundable amount
ExpenditureCanadian-controlled private corporationsCanadian public companies and non-incorporated companies (solo proprietorships and partnerships)
Labour (salary)68.5%33%
Materials and subcontracts41.5%20%
The projects do not have to be completed: if you did part of the work in 2012 and completed the project in 2013, you will claim the 2012 part with your tax return of 2012 and the rest with your tax return of 2013.

What if I already submitted my tax return for a past fiscal year? Is it too late to claim SR&ED?
You may submit your SR&ED claim for a particular fiscal year within 18 months after the end of that fiscal year. If you have already submitted your taxes, you may submit the SR&ED claim later, as a part of the tax amendment, as long as you are within the 18-months window.
What expenses qualify?
Employees' wages, subcontracts and owner’s labour represent the bulk of all claim expenses.
Materials and capital expenses are also allowed if they are used only for eligible projects, up to a certain cap.
How will I help you?
I will prepare a SRED claim for you and do everything that is in my power so the claim succeeds. This includes:
Pre-screening and projects identification
Preparation of a detailed technical report on the work you did and your accomplishments
Preparation of all tax schedules and accounting reports detailing the costs associated with the project.
Dealing with SR&ED financial and technical reviewers.
We charge a share of a successful claim amount. We do not charge any upfront fees or retainers. If the claim does not qualify, there is no fee.

Contact me at tania@sred4you.com for further information.