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SR&ED

New Alberta SR&ED ITC
Alberta Bill 48 has taken effect December 1, 2008 and it includes Scientific Research and Experimental Development (SR&ED) legislation regarding the new Alberta SR&ED Investment Tax Credit (ITC) of 10 per cent. Qualifying for the SR&ED ITC mirrors the requirements for the federal determination.

Following are key points related to SR&ED ITC:

Qualified corporations include any corporation that has a permanent establishment in Alberta that carries on SR&ED in Alberta. In other words, any provincial corporation, regardless of size or type is eligible for the Alberta ITC.
Partnerships are not eligible for Alberta ITCs.
There is a 10 per cent refundable ITC on eligible expenditures.
There is a $4,000,000 maximum expenditure limit prorated for days in a year (for short tax years) and allocated between associated companies. This implies there is a maximum $400,000 Alberta ITC that can be awarded to a company.
There are no reductions to the maximum expenditure limit.
The ITC is applied first against Alberta Taxes otherwise payable and is deemed to be paid on the corporation's balance due date for the year. This could create significant refund interest for large taxes owing for claims filed at the 18 month deadline.
The excess ITC is paid first to any outstanding tax, interest, or penalties owing to the Alberta Minister with the remaining balance refunded to the corporation.
The ITC is subject to recapture similar to the federal ITC.

For more information on the New Alberta SR&ED ITC, or how MNP can help maximize your SR&ED investment tax credits, call Ryan Mackiewich, SR&ED Practice Leader at 1.877.766.9735.

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