Numbers

SR&ED investment tax credits (ITC)¹

¹ Rates shown apply to current expenditures incurred in 2015. The refund rate is in respect of unused ITC’s on qualified scientific research and experimental development (SR&ED) expenditures. Capital expenditures and lease costs for equipment incurred after 2013 do not qualify as SR&ED.
² Unused federal and Ontario R&D ITC’s may be carried back three years or forward 20 years. For B.C. and Saskatchewan, only non-refundable credits can be carried back three years or forward 10 years. For Manitoba, unused credits can be carried back three years or forward 10 years. The 2015 Manitoba budget proposes to increase the carryforward period from 10 to 20 years, but no effective date was announced.
³ The $3 million expenditure limit is progressively reduced and then eliminated when previous year’s taxable income is between $500,000 and $800,000 or previous year’s taxable capital used in Canada is between $10 million and $50 million. Thresholds are on an associated companies’ basis, and the expenditure limit must be shared among the associated group.
⁴ 0% if the prior year’s taxable income (in aggregate for associated companies) is greater than the qualifying income limit, which is generally $500,000. The $500,000 limit is reduced where the prior year’s taxable capital (in aggregate for associated companies) exceeds $10 million, and is phased out at $50 million.
⁵ B.C. refundable tax credit for CCPC’s is 10% of the lesser of eligible B.C. R&D expenditures and the federal $3 million expenditure limit. The credit is non-refundable beyond the $3 million limit.
⁶ Alberta’s refundable tax credit is equal to 10% of qualified Alberta R&D expenditures up to a $4 million limit. This limit is shared with associated companies.
⁷ For R&D expenditures incurred after March 31, 2012 and before April 1, 2015, the Saskatchewan credit is refundable only if claimed by a CCPC on up to the first $3 million of qualified expenditures annually. Otherwise, the credit is non-refundable. For qualified expenditures incurred between March 19, 2009 and March 31, 2012, the credit was refundable to both CCPC’s and other corporations. Effective April 1, 2015 the credit rate was reduced from 15% to 10% for all corporations.
⁸ Qualified expenditures continue to include eligible capital expenditures after 2013. Manitoba ITC’s are fully refundable only for eligible Manitoba R&D activities carried out under an eligible contract with a qualifying research institute. 50% of ITC’s are refundable for in-house R&D expenditures.
⁹ Other credits are available for SR&ED work carried out by certain entities or in certain specific circumstances.
¹⁰ Effective for fiscal years beginning after Dec. 2, 2014, Quebec is imposing minimum expenditure thresholds in order to be eligible for the R & D tax credit. The amount of the threshold varies depending on the size of the corporation, in terms of assets. The Quebec rate varies from 14% to 30% for CCPCs for the first $3 million in qualified expenditures above the minimum exclusion thresholds with the credit rate based on the size of the corporation, in terms of assets. Otherwise, a 14% rate applies. The $3 million R&D salary limit is shared with associated companies. Credits received after Nov. 20, 2012 and relating to expenditures incurred for tax years starting after Nov. 20, 2012 are included in the taxpayer’s income.
¹¹ The $3 million expenditure limit for the Ontario Innovation credit is progressively reduced and then eliminated for taxable income between $500,000 and $800,000 or taxable capital in Canada between $25 million and $50 million. Thresholds are on an associated companies’ basis, and the expenditure limit must be shared among the associated group. 100% of current qualified expenditures are eligible for a refund.
¹² Yukon’s rate is 20% on R&D expenditures made to the Yukon College.