Scientific Research & Experimental Development Tax Credit Frequently Asked Questions
The following will help answer your questions about the scientific research and experimental development (SR&ED) tax credit.
How much can be claimed?
The refundable credit cannot exceed 10% of the expenditure limit, which is generally $3 million. This limit is determined according to Section 127(10.2) of the federal Income Tax Act and may be reduced as described in the Canada Revenue Agency's Interpretation Bulletin IT-151R5.
The amount of annual non-refundable tax credit that may be deducted in a tax year is limited to the amount of the corporation's income tax payable for that year.
Does the change in the phase out of the federal expenditure limit change the expenditure limit for calculating the SR&ED tax credit?
Yes, the expenditure limit for calculating the refundable credit is the federal expenditure limit.
Can a partnership claim the B.C. SR&ED tax credit?
The SR&ED tax credit allows active members of partnerships to claim their proportionate share of the partnership's SR&ED carried on in B.C., for qualified expenditures incurred after February 20, 2007.