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.