What Projects Are Eligible For SR&ED?

Written by Raj Phalpher.

Most Software Development

Regardless of whether you are developing apps for sale or software as a service or modules for internal deployment – usually has slivers of SR&ED eligible activities. As long as you are developing apps that require leveraging state of the art technologies or developing software that requires stretching the technology envelope, you probably have SR&ED.

Project Outcomes / Failed Projects

Sometimes the project outcome does not produce a workable solution. SR&ED can still be claimed as long as you can demonstrate that systematic investigation was required to overcome technological uncertainty or achieve technological advancement.

Project Size / Small And Big

Software development is very labour intensive, and very expensive labour at that. At the prevalent salary / consulting rates for computer scientists / IT professionals / software engineers, a project with six person-months of development effort can still provide tens of thousands of SR&ED tax credits. Canadian Controlled Private Corporations (CCPCs) can recover over 70% of salary expenses. That is why almost half the claims are by software development and hi-tech organizations.

Project Claims Timing

You have 18 months from the end of your fiscal year to file for SR&ED. You can amend an existing tax filing any time prior to the end of the 18-month period.

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