Tracking Project Costs for SR&ED Tax Credits

CRA regulations allow you to file for SR&ED tax credits within 18 months of your fiscal year end. This means that you can conceivably file for the past two years of eligible SR&ED costs.

According to CRA, all activities related to resolving technical uncertainties can be eligible for SR&ED tax credits, provided that these activities go above and beyond the existing technological baseline. In addition, all activities that support these hands-on activities may also qualify. It is best to acquire the services of a SR&ED consultant to determine a fair resource allocation for these hands-on and supporting activities. NorthBridge will help you to identify all eligible costs and supporting documentation needed to file your SR&ED tax credit claim within the prescribed period.

The CRA requires that you be able to account for your valid SR&ED-eligible expenditures, but if you are a first-time claimant, you likely do not have formal SR&ED tracking procedures in place. NorthBridge will work with you to identify the supporting documentation needed to successfully defend your claim.

Your NorthBridge representative will also help you to implement an activity/cost tracking system for all future claims. Ideally, a SR&ED tracking system allows all SR&ED-eligible costs to be tracked in real-time. Working with a consultant can help ensure that all SR&ED-eligible costs are identified as they are incurred, and in turn, helps you to facilitate and streamline your entire SR&ED tax credit claim process.

Tips for Tracking

  • At the very minimum, track your activities on a weekly basis.
  • Track all activities that are done – not just the ones that you know from the beginning are going to be SR&ED-eligible activities.
  • Keep notes that detail the purpose and results during all trials.
  • Keep multiple versions of designs.
  • Date all documents.