To qualify for SR&ED tax incentive programs, a business activity must:

• Advance the understanding of scientific relations or technologies;

• Address scientific or technological uncertainty;

• Incorporate a systematic investigation based on experiments or analyses by qualified personnel.

If you are not sure for SR&ED eligibility, check out our Fund Assessment Look Up.

Allowable expenditures

Businesses that are engaged in scientific research and experimental development may be able to obtain a tax credit for certain potentially allowable expenditures such as:

• Salary or wages;

• Materials consumed and transformed;

• Contract costs;

• Lease costs of SRED equipment (Will be disallowed from Jan of 2014);

• Purchase costs of SRED equipment (Will be disallowed from Jan of 2014).

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  The SR&ED ITCs on salary or wages may include those incurred in respect of SR&ED carried on outside Canada that is related to the taxpayer’s business. The salary or wages incurred outside Canada is limited to 10% of the total salary and wages directly attributable to SR&ED carried on in Canada. To calculate your SR&ED claim check our SR&ED Fund Calculator