With tax season upon us, architects should be aware of a generous tax credit they may be entitled to. In Canada, different tax credits (e.g., R&D tax credits) and business incentives are offered by different levels of government. These tax credits are designed to encourage businesses to undertake activities that will have a positive effect on the country’s economy. The incentives promote outcomes such as innovation, job creation and environmental awareness. Annually, the federal government gives out about $3.5 billion in refundable income tax credits through the program to more than 20,000 businesses of all sizes and in all industries.
R&D – Scientific Research and Experimental Development (SR&ED) Program Tax Credit
One of the best known tax credits offered in Canada is the Scientific Research and Experimental Development (SR&ED) program. The SR&ED program is intended for research and development in numerous areas, many of which fall under the realm of an architect’s work; the program covers design, development, and engineering for improved materials. SR&ED tax credits are related to incremental advancements made at the company level.
For eligible projects, the federal government provides refundable tax credits of 15% to 35% of the eligible costs, including salaries, contractor fees, and materials. Small and mid-sized companies can qualify to receive tax credits up to 65.6% of qualifying salary expenditures.
Applying for Tax Credits and Rebates
When filing a claim for any of these tax credit programs, it is important not only to show the validity of your project, but also how your project fits into the incentive program. This is particularly important for SR&ED where detailed technical descriptions are required.
For all tax credit programs, it is essential to have all aspects of your claim well documented. This may be as simple as having formal employment contracts, or it may mean you need to record your hypothesis and the results of research and development (R&D) work.
Filing a claim may be daunting; accountants or tax credit advisors can be an invaluable resource to you during the process. They have experience working with many varieties of claims, and know what specific information needs to be included to streamline the review process. An advisor can also help with individual parts of the claim, such as the technical descriptions.
Welch has a highly specialized team of business incentive experts to help you navigate through the wide range of government incentives that you may be eligible for. We can help you determine which incentives you qualify for and work with you on the application process, as well as guide you through government incentive planning and documentation preparation.
Welch has successfully supported numerous SR&ED claims for a wide range of industries including software, manufacturing, hardware and biotechnology/life sciences. Our team has worked closely with CRA on filings and has a deep understanding of the filing process, SR&ED rules and strategies to maximize amounts claimed.
For more information about how Welch can help you with your SR&ED claim, please get in in touch.