Canada SR&ED Tax Credit: Complete Guide for Canadian Businesses
The Canada SR&ED tax credit is the largest federal R&D incentive. Learn how it works, who qualifies, how much you can claim, and how to maximize your refund.
Turn this into a claim-ready next step. Check eligibility, estimate the possible credit, or preview what your CPA would review.
How the SR&ED tax credit works
The Canada SR&ED tax credit provides two benefits to businesses conducting eligible R&D: a tax deduction for expenditures in the year incurred, and an Investment Tax Credit (ITC) that directly reduces tax payable or generates a cash refund.
For Canadian-Controlled Private Corporations (CCPCs), the enhanced ITC is 35% on the first $3 million of eligible expenditures, fully refundable. This means even companies with no tax owing receive cash. Other Canadian corporations receive 15%, which is non-refundable but can be carried forward.
How much can you claim
| Company type | Federal ITC rate | Refundability |
| CCPC (first $3M) | 35% | Fully refundable |
| CCPC (above $3M) | 15% | Non-refundable |
| Other Canadian corp | 15% | Non-refundable |
Federal SR&ED credits can be stacked with provincial R&D tax credits. Ontario offers up to 10%, Quebec up to 30% for SMEs, and British Columbia 10%. For a Quebec CCPC, the combined rate can exceed 60% on eligible salaries.
Ready to turn this into a claim?
Check whether your work qualifies, estimate the possible credit, or preview the package your CPA would review.
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