What can you claim (assuming you have an eligible project)?

• Wages of employees directly involved in the SR&ED efforts
• Materials consumed in the pursuit of SR&ED
• Materials transformed as a result of the SR&ED
• Costs of SR&ED performed on the company's behalf by arms-length contractors
• Lease costs for equipment used
• Either: directly related Overhead or a Proxy amount (65% of the wages for staff Directly Engaged in SR&ED activities, subject to certain restrictions)
• Third party payments

• Shared Use Equipment (SUE): used over 50% for SR&ED
  – up to 50% of the cost over three years (allowed 25% per 12 month term)
• All or Substantially All (ASA): intended to be used 90%+ for SR&ED
  – can claim 100% of the asset's cost in the year purchased

• Any Unpaid Amounts– expenditures must be made during the year or within 180 days of the fiscal year end to be claimable
• Government and non-government assistance and/or contract payments received, receivable, or reasonably entitled to be received to the business for performing SR&ED

• Current and ASA capital R&D expenses may be claimed on Schedule 1 as an expense to reduce taxable income, or carried forward indefinitely for future use
• Claimants can claim ASA capital expenditures immediately or carried forward
• Allows client to claim federal and provincial ITCs on net expenditures

Examples of how the Investment Tax Credits (ITCs) are calculated:

1. That there are other business activities and related costs, so the proxy calculation is not capped.
2. That none of the employees performing the SR&ED own 10%+ of the corporation's shares.
3. All work was performed in Nova Scotia and paid during the year.
4. No government grants, forgivable loans, etc. or contract payments were received.

• IT and Computer Science Companies
• Manufacturing, Machinery and Equipment Companies