5 SR&ED Updates You Need to Know for 2014

2014 tax credits

Well, 2014 is finally here! With a new year, comes implementing the new mandatory changes to the SR&ED tax form introduced by the CRA on October 31, 2013.

Since January 1, 2014, every claimant will need to use the updated T661 form to apply for SR&ED tax credits in their 2014 fiscal year.

Here is a recap of the changes that you’ll need to keep in mind:

1. All claimants now answer the same three questions in Section B (Project Description), regardless of whether Basic Research, Applied Research or Experimental Development is undertaken. The order of the questions has also been updated to the following:

  • What scientific or technological uncertainties did you attempt to overcome – uncertainties that could not be removed using standard practice?
  • What work did you perform in the tax year to overcome the scientific or technological uncertainties described in Line 242? (Summarize the systematic investigation or search)
  • What scientific or technological advancements did you achieve as a result of the work described in Line 244?

2. The proxy overhead percentage (one of two methods allowed to allocate overhead amounts associated with your R&D) will be reduced from 60% to 55%.

3. Can no longer claim capital expenditures or the right to use capital property.

4. The federal SR&ED rate for large corporations will be reduced from 20% to 15%.

5. Introduced new section (Part 9) to capture more information about SR&ED claim preparers and billing rates.

For a full description and our interpretation, read our “How Will the Form T661 Changes Affect My SR&ED Claim?” blog post or contact us to talk further.

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