SR&ED Tax Credit Program Tips

Learn more about SR&ED tac credit program tips. For projects that are part of the SR&ED Tax Credit program, certain measures must be taken to determine whether this work qualifies as experimental development. The CRA considers five key questions when classifying projects. The questions are as follows:

  1. Was there a technological or scientific uncertainty?
  2. Did the effort involve reducing or eliminating that uncertainty?
  3. Was the overall approach consistent with a systematic investigation or search? Did it include formulating and testing the hypotheses by means of experiment or analysis?
  4. Was the overall approach undertaken in an effort to achieve a technological or a scientific advancement?
  5. Was a record of the hypotheses tested and the results kept as the work progressed?

These questions help provide a detailed overview of the steps that the CRA takes when determining potential tax credits via a SR&ED claim. These questions are connected and have been boiled down to several core qualifying criteria.

1. Technological Uncertainty

Technological uncertainty can be defined as the question of whether a given result or objective can be achieved or how to achieve it. In either case, it is unclear whether the result or objective is achievable based on generally available scientific or technological knowledge or experience.

When certain technological limitations or shortcomings prevent a new capacity from being developed, business project teams must develop their own solutions to overcome the obstacle in their technological project.

2. Systematic Investigation

Systematic investigation involves defining the problem at hand, proposing a solution for that problem, planning and testing the hypothesis. Do this by experimenting or analyzing and by reaching a logical conclusion based on your results.

To properly resolve the technological uncertainty, the team must have a documented process. This will help provide the tools they need to reach a solution.

3. Technological Advancement

Technological advancements refer to knowledge that is acquired in an effort to improve or create products or processes. When a team’s technological goals are unable to be achieved due to certain limitations or shortcomings, it can be challenging to develop a new or improved capacity.

Fortunately, this is where technological advancements come in. It’s crucial for team members to recognize that the projects they develop don’t always have to be successful. Even if you end up falling short of your goals, you’ll have gained a valuable experience that can enable you to do better later on in the future.

With help from these three different criteria, project managers can reach their goals in a far more efficient and productive manner no matter what they’re working on. For more information on the SR&ED tax credit program check out our guide.


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