The following CRA summary from the SR&ED Investment Tax Credit Policy has been updated to reflect the 2014 changes (The original referred to the 20% Federal ITC rate which has been reduced to 15% for 2014 and subsequent years.  The enhanced rate continues to be 35%. As well, the details on capital expenditures have been eliminated since they are no longer eligible from 2014 on) 

Type of Claimant
Nature of Expenditure
Rates on SR&ED Expenditure up to Expenditure Limit
Refund Rate
Rates on SR&ED Expenditures Over ExpenditureLimit (a)
Refund Rate

Type of Claimaint:

Qualifying
Corporations (b)
other than excluded
corporations (c)

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

35%

Refund Rate:

100%

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15%

Refund Rate:

40%

Type of Claimaint:

Excluded
corporations

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

35%

Refund Rate:

40%

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15%

Refund Rate:

40%

Type of Claimaint:

Canadian-controlled
private corporations
(CCPCs)(d) other
than qualifying or
excluded corporations

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

35%

Refund Rate:

100%

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15% (e)

Refund Rate:

0%

Type of Claimaint:

All other
corporations not
included above

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

15%

Refund Rate:

0%

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15%

Refund Rate:

0%

Type of Claimaint:

Individuals, certain
trusts and unincorporated businesses

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

15%

Refund Rate:

40%

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15%

Refund Rate:

40%

Type of Claimaint:

Partner of a partnership

Nature of Expenditure:

Current

Rates on SR&ED Expenditure up to Expenditure Limit:

15%

Refund Rate:

40% (f)

Rates on SR&ED Expenditures Over ExpenditureLimit (a):

15%

Refund Rate:

40% (f)

Notes

  1. Expenditure limit is a maximum threshold of $3 million per year.
  2. Qualifying Corporation as set out in ss. 127.1(2) is generally a CCPC that is within certain income and capital limits.
  3. Excluded Corporation as set out in ss. 127.1(2) is typically a corporation that is controlled by persons exempt from tax.
  4. CCPC as set out in ss. 125(7) is a private corporation that is not controlled by either a non-resident nor a public corporation or any combination of the two.
  5. It is possible that all of a CCPC's (other than a qualifying or excluded corporation) investment tax credits (ITCs) will be earned at the basic rate.
  6. Only partners that are qualifying corporations, individuals, and certain trusts may be refunded their allocated ITC at the rate of 40%. The ITC allocated to a member of a partnership that is a corporation, other than a qualifying corporation, cannot be refunded. For more information, please refer to theSR&ED Claims for Partnerships Policy.

Provincial Incentives

Most provinces offer incentives for SR&ED that can be claimed in addition to the Federal Incentives.  When claiming provincial incentives, some planning may be necessary to maximize the refundable portions available to the corporation.