The Canada Revenue Agency (CRA) has revised SR&ED filing requirements for partnerships with corporations as its members. The new requirements apply to partnerships with fiscal periods ending on or after January 1, 2011.
Under the new requirements, a partnership that has a corporation as a member must file a partnership information return. For the purposes of Scientific Research and Experimental Development (SR&ED) and to facilitate processing, such a partnership should file a completed Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim with this return.
The Form T661 should be filed with the partnership information return no later than 12 months after the earliest of all filing due dates for the return of income of the members for the tax year in which the partnership’s fiscal period ends. Each member would then be able to meet the deadline to claim the SR&ED investment tax credit (ITC) allocated to them.
A corporation that is a member of a partnership should no longer file Form T661 for the partnership along with its T2, Corporation Income Tax Return. Investment tax credits allocated to corporations by partnerships must now be supported by an information slip T5013, Statement of Partnership Income for the ITCs to be processed by the Canada Revenue Agency (CRA).
However, a member of a partnership can still file the Form T661 on behalf of the partnership, but the SR&ED claim will not be processed unless a partnership information return, which agrees with the Form T661, has been filed.
The CRA is currently in the process of updating the SR&ED Filing Requirements Policy and the SR&ED Claims for Partnerships Policy.