When dealing with the CRA or a scientific research and experimental development tax consultant, CRA SR&ED terms tend to be tossed around a fair amount. Sometimes it feels like there’s a secret code! You don’t necessarily need to know every piece of jargon in the industry (that would be a very long post), but we’ve put together some of the more common terms that may help you follow the claim process a little better. It may also improve and speed up dealings with your consultant or the CRA, so you can spend more time doing what you do best – taking care of your business.
SI (Systematic Investigation). This is the chronological breakdown of what exactly was done with the eligible project. Another common term that means the same thing is “process flow”. Think of it as the story of the project in chronological order.
Technological Obstacle: Otherwise stated as: What kind of problems did you have? What made the project difficult?
Technological Advancement: What was your trick of the trade or secret formulation?
Applied Research: The CRA defines Applied Research as: Work undertaken for the advancement of scientific knowledge with a specific practical application in view.
CCPC: Canadian Controlled Private Corporation. A company filing for SR&ED must be a CCPC to qualify for the program.
T2: T2 is the corporation income tax return. Non-profit organizations, tax-exempt corporations and inactive corporations all need to file their T2.
T661: The T661 form is the main SR&ED form that needs to be submitted to claim SR&ED benefits. This form includes all estimated expenditures and overhead costs. It is best submitted with the T2 to ensure a quick process time.
Line 230: This line is a simple check to indicate you were attempting to achieve a technological advancement.
Schedules: This may be one of the more confusing terms used in the SR&ED process. Schedules are actually parts or sections of the T2 form that need to be completed. These sections cover items including deductions, employees and company profits.
RC59: The RC59 is a form the client must sign that acts as a release form. It gives the consultant authorization to contact the CRA and check up on claim status. Without a signed and submitted RC59, the CRA will not release any information to a third party.
Line 240: This line is about what technological advancements were made during the project.
Line 242: This line asks what technological obstacles were overcome to get to that technological advancement.
Line 244: This line is used for listing any materials or documents that pertain to the SR&ED activities being claimed.
You don’t have to be a SR&ED expert to enjoy the benefits of the program – your consultant is there to take care of the confusing parts. However, a better understanding of the program including the main terms can make the process easier on both you and the consultant. If you ever have any questions, it’s best to ask your BeneFACT® SR&ED consultant. No question is too small! If you and the consultant are on the same page, you can both work together to maximize the claim and possibly even get the claim through quicker.