Biotechnology and life sciences are perhaps the most obvious industries that come to mind when talking about the Scientific Research and Experimental Development (SRED or SR&ED) tax credit program. But exactly what qualifies under the program’s strict guidelines? Read on to learn about specific activities that may be eligible and easily missed.
There are three fundamental criteria used to decipher whether a project is eligible for SR&ED tax benefits or not:
It is also important to note that success or failure does not matter in the eyes of SR&ED. Even if a project is a complete failure, you may still be able to claim it as part of the SR&ED program. With SR&ED, it’s not about winning or losing, but how you play the game.
If a project has met the three criteria of SR&ED, there is a high chance that it is eligible for SR&ED benefits. If you’re wondering about specific projects, here are a few examples to get you on the right path:
There is one question that gets asked quite a bit by those new to the SR&ED process, and that’s about marketing trials. It is important to note that market research, routine data collection and sales promotions are not eligible under the SR&ED program guidelines.
One of the best ways to know if a biotechnological or life science activity is eligible is to ask. SR&ED experts, like those at BeneFACT Consulting Group, work on SR&ED claims all day, every day. They have an excellent knowledge of not just the system, but what part each project plays in submitting a claim. Putting the SR&ED puzzle together can be a bit tricky but, if done correctly, can make a very pretty picture in the end.
*The information above is meant for informational purposes only, and not to be used as financial or legal advice.