SR&ED Tax Credit Program: Qualifying Criteria

It’s important to take certain steps to determine whether your project qualifies as experimental development. The CRA takes five important questions into account when classifying projects that are a part of the SR&ED Tax Credits program. These questions include the following:

  • Was there a technological or scientific uncertainty involved in the process?
  • Did the effort require you to reduce or remove that uncertainty?
  • Are you confident that the overall approach matched up with a systematic investigation or search, such as subjecting the hypotheses to strict testing?
  • Was the overall approach undertaken in order to achieve a certain type of technological or a scientific advancement?
  • Did you keep a record of the hypotheses tested and the results as the work progressed?

With help from this key set of questions, you can have a clearer and more detailed idea of the steps that the CRA takes when executing work for its resolution. Because each of these questions has a strong connection to one another, they can all be reduced to several qualifying criteria for any type of SR&ED project.

1.

The first qualifying criterium to be discussed is technological uncertainty. The definition of technological uncertainty is whether a given result or objective is able to be achieved. It’s worth noting that, in many situations, it isn’t clear whether the result or objective is achievable based on generally available scientific or technological knowledge or experience.

When specific types of limitations in technology stop a capacity from being properly developed, the SR&ED Tax Credits team works diligently to allow the entire crew to overcome the problems they’re facing with their technological project.

2.

Systematic investigation is the second qualifying criteria that should be considered. This criterium involves clearly defining the problem at hand, coming up with an effective solution for that problem, planning and testing the hypothesis through rigorous analysis and experimentation, and reaching a logical conclusion based on the results.

In an effort to properly resolve the technological uncertainty, the CRA SR&ED crew is required to have a documented iterative scientific process. This serves to provide the tools that they need to reach a viable solution.

3.

Technological advancements refer to knowledge that is obtained in order to advance the overall understanding of technology. When certain limitations or shortcomings prevent a team’s technological goals from being fully achieved, it can become a significant challenge to form a new or improved capacity.

This is where the benefits of technological advancements come in. It’s vital for all team members to acknowledge that the projects they develop don’t always have to turn out to be a success. Even if you end up falling short of the goals that you set for yourself, you will still have gained a valuable wealth of experience that can enable you to do better later on in the future.

With help from these three different qualifying criteria for CRA SR&ED projects, project managers can accomplish their goals in a much more efficient and productive manner, regardless of the type of project they’re working on.


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