In our practice we find that at times clients don’t fully understand why after claiming SR&ED investment tax credits the cheque they receive from the government or the amount of available tax credit carry forward is different from the amount claimed. To understand this, let’s look at SR&ED differently. Instead of exploring how SR&ED is treated from the income tax act perspective and what gets deducted from where, let’s look at SR&ED from a practical, business point of view. The view offered in this post will equally apply to OIDMTC, IRAP, SDTF, CIIRDIF, Telefilm and any other form of government assistance. As soon as we switch from looking at SR&ED as an investment tax credit (an accounting term) to viewing SR&ED as a payment for the services rendered to the government (see our blog posting entitled SR&ED Advice: Treat the CRA Like a Customer), the rest becomes very easy to understand. […]
Alexei Gavriline
It is common knowledge that a company has 18 months following their fiscal year end to submit a claim for SR&ED Investment Tax Credits (ITC). The claim can be submitted concurrently with a T2 or filed later as an amendment. However, the time you will wait before receiving your SR&ED ITC or cash depends on three factors: (a) how the SR&ED claim is submitted, (b) when it is submitted, and (c) whether the claim triggers a review. When a SR&ED claim is submitted as an amendment, the CRA will typically review it within 8 months following submission. If a SR&ED claim is filed concurrently with your annual tax return, the CRA will usually process the claim within 3 months following submission. Provided your SR&ED claim doesn’t trigger a CRA review or an audit, your refund will be on the way shortly after the claim is processed. It is also not […]