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Federal Budget SR&ED Changes

The federal budget for 2019 included a change that provides easier access to the enhanced federal ITC rate of 35% on SR&ED credits. If your company is a Canadian-controlled private corporation (CCPC), and has taxable income exceeding $500,000 in the previous taxation year, the $3 million expenditure limit on qualified SR&ED expenditures is reduced, and eliminated when taxable income reaches $800,000.

Elimination of the prior year taxable income as factor in determining expenditure limit

In the federal budget of 2019, the government has proposed to repeal the prior year taxable income as a factor in determining the annual expenditure limit for SR&ED credits, applicable to tax year sending on or after March 19, 2019.

The expenditure limit restriction based on taxable income will continue to apply.

Please contact your LFG Partners advisor for further details on how this federal budget change impacts your business.


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