Saskatchewan Research and Development Tax Credit (Provincial SR&ED)

Funding Amount

The Saskatchewan R&D tax credit follows the federal SR&ED rules for eligible expenses and activities.

• CCPC’s may earn a refundable Investment Tax Credit (ITC) at the rate of 10% on qualified SR&ED expenditures of up to $1 million per annum (expenditure limit).

  • A 10% non-refundable tax credit may be claimed by CCPC’s for expenditures in excess of the expenditure limit.

  • The expenditure limit is equal to one third of the federal expenditure limit

• Other corporations (non-CCPC’s) may claim a 10% non-refundable credit.

• The SK R&D tax credit is considered government assistance and will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

• Any unused portion of the tax credit may be carried back 3 tax years and/or carried forward 10 tax years.

Eligible Applicants

The Saskatchewan R&D tax credit is available to corporations (including corporations that are members of a partnership and corporations that are beneficiaries of a trust) that have a permanent establishment in Saskatchewan. The eligibility requirements for the program require that the business is eligible for tax credits through the federal SR&ED funding program:

• Corporations and active members of partnerships (other than specified members), performing either basic research, applied research, or experimental development in Saskatchewan; and

• Applicants should be developing new products, processes, or making incremental improvements to them.

• Expenditures incurred by an individual do not qualify.

Eligible Expenditures

The Saskatchewan R&D tax credit follows the federal SR&ED rules for eligible expenses and activities. Many of the expenses shown here are similar to the expenses that the business can get funded through the federal SR&ED funding program. The SK R&D Tax Credit can be stacked with the federal SR&ED program.

• Labour: Based on time spent on eligible activities in Saskatchewan.

• Contractors: Portion of contract related to SR&ED performed on the business’ behalf. Must be a Canadian contractor and work must be performed within the province of Saskatchewan.

• Third Party Payments: Payments (money or in-kind) to an entity to carry on SR&ED in the province of Saskatchewan.

• Materials: Materials can be purchased from outside Saskatchewan but must be used in the prosecution of SR&ED in Saskatchewan.

• Overhead: Calculated using the Proxy (Quick) or Traditional (Detailed) method.

Program Deadline

The Saskatchewan R&D tax credit is available for all open tax years. The program is administered by the CRA and applicants should have filed a federal SR&ED claim within 18 months of tax year end.

To determine whether your Saskatchewan business is eligible for Scientific Research and Experimental Development (SR&ED) tax credits, consider speaking with the Ryan team of Canadian SR&ED Consultants.