On Friday, December 13th, the federal government announced enhancements to the SR&ED program as a part of the 2024 Fall Economic Statement.
Below is a summary of what was released. We will update as more details and information are shared.
SR&ED Program Updates
The proposed changes would see the SR&ED program further capitalized by proposing to invest an additional $1.9B over the next six years along with enhancements to eligibility and expenditures.
Program Enhancements:
- Increase the expenditure limit on which the enhanced 35 per cent rate can be earned from $3 million to $4.5 million. As a result, qualifying CCPCs would be able to claim up to $1.575 million per year of the enhanced, fully refundable tax credit;
- Increase from $10 million and $50 million, to $15 million and $75 million, respectively, the taxable capital phase-out thresholds for determining the expenditure limit;
- Extend eligibility for the enhanced 35 per cent refundable tax credit to eligible Canadian public corporations on up to $4.5 million of qualifying SR&ED expenditures annually.
- Restore the eligibility of capital expenditures for both the deduction against income and investment tax credit components of the SR&ED program. The rules would be generally the same as those that existed prior to 2014 and would apply to property acquired on or after the date of the 2024 Fall Economic Statement and, in the case of lease costs, to amounts that first become payable on or after the date of the 2024 Fall Economic Statement.
These reforms will come into force for taxation years that begin on or after December 16, 2024, unless otherwise specified. Further details will be announced in the 2024 Fall Economic Statement.
