When can I file an application for SR&ED tax credits?
An application for tax credits in R&D / SR&ED may be submitted at the end of your company's fiscal year. Your company must first invest money in research and development (R&D) i.e. wages, materials, subcontractors, etc. prior to submitting an initial application for SR&ED tax credits. Your application must be produced and submitted with your federal and provincial tax returns. Please note, if your business is incorporated, the end of your fiscal year is based on the date of its incorporation. If your business is registered, then the end of your fiscal year is December 31st.
What is the deadline for filing an application for SR&ED tax credits?
If your business is incorporated, you have a period of 18 months following the end of your fiscal year to apply for R&D tax credits / SR&ED tax credits. If your business is registered, you have 18 months minus 15 days. In other words, you have until June 15th of the following year. It is best to submit an application along with your original tax return as this will speed up processing. You can also submit an application even though you've filed your federal and provincial tax returns as long as you are within the deadlines. In which case, the original tax returns will simply be amended (modified) in order to include the new forms identifying the expenditures in research and development (R&D). The amended tax returns will then be resubmitted to Revenue Canada and Revenu Québec. This will slow somewhat the processing of your application, but have no impact on the anticipated amounts.
What we must produce and submit?
An application for R&D tax credits / SR&ED tax credits requires the production of a scientific report justifying the nature and the eligibility of your research and development (R&D) which must be sent to Revenue Canada only. As the nature of the eligible expenses differs from Revenue Canada and Revenu Quebéc, it is required to submit an expense report tailored to each level of government.
Who will process my request for SR&ED tax credits and how?
The eligibility of your application is first assessed by Revenue Canada. A scientific advisor specializing in your field of expertise will analyze the science of your application in order to confirm whether it meets the eligibility criteria of the program. It is also possible that a financial examiner evaluates the relevance of research and development expenditures that have been submitted to Revenue Canada. Once the analysis is completed by Revenue Canada, Revenue Canada's decision is then transmitted to Revenu Québec. Just as with Revenue Canada, a financial examiner will proceed to evaluate the research and development expenditures that have been submitted to Revenu Quebéc. It is possible that Revenue Canada and/or Revenu Québec require additional information to complete the processing of your application.