Sr&ed Tax Incentive Program - A War Chest For Small And Mid-size Businesses

By Author: Jamie Hanson
Total Articles: 3534
Comment this article

The ongoing economic recession and environmental concerns - these two issues make it more challenging for small and mid-size businesses in Canada not only to succeed, but in many cases to survive.

Did you realize that the Government of Canada developed and implemented a unique program to help small and mid-size businesses operate successfully?
The SR&ED tax incentive program is a great "war chest" resource, especially during the current economic downturn.

Each year, the SR&ED program provides over $4 billion in refunds and tax credits to over 18,000 claimants. Of these, approximately 75% are small businesses.

Naturally, there are questions you might be asking yourself now. Some of those could be:

Your Question: What is the SR&ED program?

Our Answer: The Scientific Research & Experimental Development (SR&ED) program is a Canada Revenue Agency (CRA) initiative that provides incentives in the form of refunds and tax credits to Canadian businesses of all sizes, and in all sectors for R&D conducted in Canada.

Your Question: How does my business benefit from this ...
... program?

Our Answer: The SR&ED program helps you to:

- fund technological and environmental advances that keep your company competitive:
- maximize the return on your investment for the above initiatives
- better position your company for future R&D and experimental projects

Your Question: How much do I get?

Our Answer: Typically, SR&ED refunds range between $20,000 and $500,000.

Here is an example: Assuming your company spent $ 100,000 on salaries and $ 60,000 on consulting fees, and 75 percent of the labour and consulting fee was attributed as Experimental Development expenses, your claim size is as follows:

100,000x0.75x0.685 + 60,000x0.75x0.415 = $ 70,050

Have a look at some case studies here:

Now it's our turn to ask you: Are you interested in getting $20,000- $500,000?
If yes, do you qualify for the SR&ED refund?

To qualify for the refund, you must:
- be an incorporated Canadian company
- have a payroll (the salary paid through T4), or consulting fees
- have production (it can be anything - software development, bakery, printing, metal forming, chemical manufacturing, etc.)

This article was written by a founder of SRED Unlimited a consulting firm specializing in SR&ED tax incentive program. Contact SRED Unlimited to see if you qualify for the SR&ED refund.