We know, you probably aren’t up to speed on all of the business tax credits available. As an entrepreneur, your job is to stay on top of your day to day operations. At Numetrica, our job is to know every tax credit that can benefit your business and save you money. Today, we are writing this blog to let you know there is a specific tax credit out there most companies don’t know about, including you!
It’s easy to claim and you just might be eligible. So, what is this special tax credit? We are talking about the SR&ED Tax Credit. In Canada, this is a Scientific Research and Development Tax Credit only certain businesses are eligible for. Let’s take a look at exactly what the SR&ED Tax Credit is and how it can help you save money.
What is SRED?
The SR&ED Tax Credit, also known as the SRED Tax Credit or even referred to as “Shred,” stands for The Scientific Research and Experimental Development Program. In Canada, this program has been designed to help reimburse companies who need to conduct research and development for their business. But not every business can apply.
Who is Eligible?
As its name suggests, this tax credit falls under the category of “scientific research and experimental development.” What does that mean exactly? Any company that falls under the scope of scientific work such as laboratories and biotech qualify. Notably, that doesn’t cover the range of most businesses.
However, if you are in any way in the technology space, you may be able to claim a SRED Tax Credit. It also extends to engineering, software development and tech start-ups. If you are trying to make any advancements at all in the software you create, this is considered Research and Development by the Canadian government.
How Much Money Are We Talking About?
Alright, let’s get to the part you care about the most. How much of a tax credit will this get you? We’ll get to that in a moment. First, you need to ask, in what form will this credit apply?
There are three ways you can earn the SRED Tax Credit:
Now, how much can you expect to get? If you are a CCPC, you can look forward to receiving up to 35% of your qualifying Research and Development expenses, up to $3 million.
Not a CCPC? Expect a flat rate of 15% of your Research and Development fees to be credited.
Both can be claimed against what you owe or sometimes can be refundable, depending on your business niche.
Do Business Need to be Profitable to Quality?
Perhaps the best part about the SR&ED Tax Credit, is that your business does not need to have revenue in order to apply. The Canadian government encourages innovation and that doesn’t always equal an immediately profitable business. Besides, how can you even start a tech company without first developing your product?
How Long Does It Take?
The SRED Tax Credit can be faster to complete than a typical loan or new investor coming on board at your company. In fact, most claims are processed in less than 60 days. In the event that your business comes under further review, or if you are looking for a refundable credit, this process can take up to 180 days.
How Do I Claim my SRED Credit?
We thought you’d never ask. When it’s time for you to apply for your SRED Tax Credit, Numetrica is here for you. As long as we have the information we need, we can both prepare and file this on your behalf.
First, you want to make sure that your company actually has a chance of receiving the credit. Make sure that the scope of your research falls under the guidelines. You must show proof of technological uncertainties, technological advancements, and scientific or technical content. Any claim submitted without documented proof will be immediately denied.
As a business owner, tax credits are probably the last thing on your mind. You need a strategic partner like the superheroes of Numetrica to help walk you through any tax credit application. Not only will we help you apply for the SRED Tax Credit, we will help you obtain any tax credit that is applicable for your industry.
At Numetrica, we are ready to be your personal, virtual Chief Financial Officer, and take on any financial responsibilities from cloud accounting to tax credits. We’re here for you!
When you subscribe to the blog, we will send you an e-mail when there are new updates on the site so you wouldn't miss them.
I highly recommend Moe Tabesh. His service is phenomenal, to say the least. His tax knowledge is extensive and he’s been able to save me a substantial amount of money by following his recommendations. In addition, he is warm, kind, understanding, positive, and flexible, which are qualities I find rare in most accountants I’ve worked with. You’re in good hands with Moe, I can’t recommend him enough.
Moe and everyone at Numetrica have been incredible at helping with my new corporation and corporate and personal tax returns and my other small business. Their accounting skills are out of this world and the technology they use makes everything so simple and fast. The time you will save will be worth every penny. Thanks again Moe for all your help!
Mr Tabesh (Captain Number Cruncher) and his perfect team are not only professional in their fields, they are extremely passionate about their clients! Numetrica City continues to support us with corporate and personal tax returns, bookkeeping (thank you so much Sherry ) and We are so happy and appreciative for you and your responsible team, Moe!!!
I really recommend these guys to everybody.
I did my first Corporate tax return and cloud accounting with Numetrica City and I am very satisfied with the work they did. The team was very responsive and answered all my questions. I 1000% recommend their services.
I would highly recommend Numetrica City-Accountants, Tax and Bookkeepers. Exceptional customer service. I am assured that all my company tax services and payroll are taken care of because of the great team that Moe has. I like the fact that I do not have to worry about driving to a physical location for my accounting services, my company's accounting tax preparations are done online due to the excellent cloud service Numetrica City has. Definitely score a10/10. Thank you for all the good work that you guys do. Greatly appreciated!
Trust in the superhero accountants of Numetrica to keep your numbers in order and for expert advice on growing your business. Numetrica specializes in providing clients with in-depth accounting and bookkeeping services in Canada and the United States as well as financial advice to assist you in making the right decisions for your business.