How to apply for SR&ED funds

Canada's SR&ED research tax rebate program is used by that countries manufacturers to reduce R&D spending. If you are a Canadian Manufacturer its worth looking into this program and taking the time to understand how to apply for it.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• A suitable project
• Technical Experts
• Accounting Professionals

1. Download and read through the guide to SR&ED program. The link is provided at the bottom of this article. The guide is extensive and it will outline the how you must describe your project and what types of expenses are valid for this rebate program.

2. Examine the SR&ED Application form T661. A link to the form is provided below. In the first part of this form you have to provide basic business information including name and address and contact information.

3. The next part of the from involves describing your project. This section is generally taken care of by someone intimately familiar with all the technical details of the project.

4. Once the project has been described you now have to detail out the expenses that are directly related to this project. Your companies accountant would know best how to present this information. The accountant will have to work closely with the technical expert to determine what charges are and are not related to the research project.

5. The final step involves summarizing the expenses and deciding what form of deduction would best suit your business. Input Tax Credits or offsetting expenses against sales for the current tax year.

Tips & Warnings

• The application procedure is quite detailed, expect the SR&ED application process to take as much time as submitting your yearly business and corporate taxes.
• Dont rush the submission process. Take your time and ask the Canadian government for clarification on areas of the submission.

Resources

• For more detailed information, click here
• SR&ED Guide

[nikolaisred]

on 10/8/2009 Great post ScreenKing!

I would like to add, that if you never applied for SR&ED before, it might be a great idea to hire a consultant - most of us charge a performance based fee at the end of the process.
Think of it as you think about taxes - your accountant does them for your business, because he knows the ins and outs of the system - so you pay less.
A consultancy with large experience and technical expertise in your industry will bring in a larger refund, and save you a lot of time. A lot.

- Nik Rostarchook.