Working on Your R&D? Review the 2014 SR&ED Program Changes

May 22 2014
By: boastcapital
Categories: SRED Resources
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SRED program changes

With the June claim deadline quickly approaching for claiming 2012 SR&ED expenditures* we thought we’d give you a reminder of the SR&ED program changes affecting your work today. Here’s a brief overview of the program changes that were implemented Jan 1, 2014 you’ll need to keep in mind as you work through your R&D projects for the remainder of the year:

2014 SR&ED Program Changes:

1. All claimants now answer the same three questions in Section B (Project Description), regardless of whether Basic Research, Applied Research or Experimental Development is undertaken. The order of the questions has also been updated to the following:

  • What scientific or technological uncertainties did you attempt to overcome – uncertainties that could not be removed using standard practice?

  • What work did you perform in the tax year to overcome the scientific or technological uncertainties described in Line 242? (Summarize the systematic investigation or search)

  • What scientific or technological advancements did you achieve as a result of the work described in Line 244?

2. The proxy overhead percentage (one of two methods allowed to allocate overhead amounts associated with your R&D) is reduced from 60% to 55%.

3. You can’t claim capital expenditures or the right to use capital property.

4. The federal SR&ED rate for large corporations or foreign-owned entities (non-CCPC) will be reduced from 20% to 15%.

5. If you use a third party to help you file your SR&ED claim, you must fill out Part 9. This part captures more information about SR&ED claim preparers and billing rates and there is a fine if you don’t provide this information.

And remember: document, document, document. Not only will it make your claim stronger should your claim be reviewed, but it could also help you maximize expenditures you weren’t even aware you were eligible for.

*for companies with December fiscal year end

For a full description and our interpretation on how these changes may or may not impact your 2014 SR&ED claim, read our “How Will the Form T661 Changes Affect My SR&ED Claim?” blog post.

 

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    Boast Capital is a team of engineers and finance professionals with over 20 years experience helping companies in Canada and the U.S. successfully claim and maximize R&D tax credits.
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