Scientific research and experimental development tax credit
Last updated on February 18, 2026Budget 2026 proposes to remove the expiration date for the scientific research and experimental development (SR&ED) tax credit.
Budget 2026 also clarifies that B.C. intends to accept federal proposed changes to the SR&ED program for tax years that begin on or after December 16, 2024. This intention is subject to approval of the legislature. Changes impacting the B.C. SR&ED program include:
- Restoring eligibility of capital expenditures as BC qualified expenditures
- Expanding eligibility for the refundable tax credit to eligible Canadian public corporations (ECPC)
- Increasing the expenditure limit for the refundable tax credit from $3 million to $6 million for SR&ED qualified BC expenditures
- Increasing the phase-out threshold for the prior-year taxable capital for determining a Canadian-Controlled private corporation (CCPC)'s expenditure limit to $15 million. The expenditure limit phases out completely once the prior-year taxable capital reaches $75 million
These changes are subject to the approval of the legislature.
The B.C. scientific research and experimental development (SR&ED) tax credit is for qualifying corporations that incur BC qualified expenditures before September 1, 2027. Budget 2026 proposes to remove this expiration date.
Qualifying corporations that are CCPCs may claim a refundable tax credit. Budget 2026 proposes to expand eligibility for the refundable credit to ECPCs effective for the tax years that begin on or after December 16, 2024. Qualifying corporations that are CCPCs or ECPCs may claim a refundable tax credit of 10% of the lesser of:
- The corporation's SR&ED qualified BC expenditure for the tax year, or
- The expenditure limit (generally $3 million), as defined in the federal Income Tax Act. Effective for tax years that begin on or after December 16, 2024, the expenditure limit is proposed to increase to $6 million, once federal legislation is passed
A non-refundable tax credit may be claimed for expenditures in excess of what has been claimed for the refundable tax credit. The non-refundable credit may be claimed by all qualifying corporations. The non-refundable credit for a tax year is 10% of the corporation's SR&ED qualified BC expenditure for the year less:
- The amount of its refundable credit for that year, and
- Any amount renounced for that year
The non-refundable credit can be carried forward 10 years or back three years.
For full details about the SR&ED tax credit, including eligibility requirements, and how and when to claim the credit, see the bulletin British Columbia Scientific Research and Experimental Development Tax Credit (CIT 007) (PDF, 190KB).
Claiming the credit
You can claim the credit by completing the British Columbia Scientific Research and Experimental Development Tax Credit (T666) form and submitting it with your T2 Corporation Income Tax Return. Enter the amount of the non-refundable credit on line 659 and the refundable credit you are claiming on line 674 of Schedule 5, Tax Calculation Supplementary – Corporations.
You must claim the credit no later than 18 months after the end of the tax year in which the qualified expenditures are incurred.
Legislation
The following legislation applies to the B.C. SR&ED tax credit:
Read about the federal scientific research and experimental development tax incentive program.