How Far Back Can You Claim R&D Tax Credits?

Scientific Research & Experimental Development (SR&ED) tax credits provide essential capital for countless companies across industries. If your company is among them, following all deadlines and rules for submitting claims is of the utmost importance. Failure to do so may result in reduced or lost tax credits and R&D tax refunds, setting back critical R&D work as you search for alternative sources of funding.

Before submitting your subsequent claim, you may be wondering how far back you can receive R&D tax credits? Discover the essential reporting deadlines and other pertinent information below.

Income Tax Filing and SR&ED Reporting Deadlines

Following the submission of your income tax return, SR&ED eligible expenditures can be claimed only within 12 months. They may not be back-dated for previous years. Per the Canada Revenue Agency (CRA) SR&ED Filing Requirements Policy, SR&ED claims are subject to strict reporting deadlines. These dates break down as follows based on your organization’s structure:

Corporations

• Income tax returns: Filed no later than six months after tax year-end
• SR&ED claim: 18 months after your tax year-end

Trusts

• Income tax returns: Filed no later than 90 days after tax year-end
• SR&ED claim: 15 months after tax year-end

Individuals and Partnerships

• Income tax returns: Filed by June 15th of the following year
• SR&ED claim: 17 ½ months after calendar year-end

SR&ED claim forms and information will only be accepted after these deadlines in extremely limited circumstances. When the SR&ED reporting deadline falls on a Saturday, Sunday, or public holiday, the CRA will extend the reporting deadline by one business day. Only public holidays recognized by the CRA will qualify for an extended reporting deadline, and these dates vary by province.

Timely Submission Requires Complete Claims

Just as the CRA will not consider SR&ED claims submitted after the reporting deadline, they do not accept those sent in with incomplete forms or information. To ensure your claim is processed in a timely fashion, it must be submitted with Form T661 and all the form’s prescribed information, including:

• General information
• Project information
• Calculation of SR&ED eligible expenditures
• Total of qualified SR&ED eligible expenditures
• Project costs
• Additional information
• Claim checklist
• Claim preparer information
• Certification with the name of an authorized signing officer or the name of the person or firm that completed the form

You must also submit Schedule T2SCH31 if you are a Corporation or Form T2039 (IND) if you are an individual. Both forms are broken down in greater detail on the CRA’s website.

The information must be delivered on or before the SR&ED reporting deadline. The CRA will not consider your expenses as SR&ED eligible expenditure if any information is missing or filed after this date. Estimates and partial claims will not meet the requirements, and the CRA does not accept letters of intent to file.

Why You Should File Your SR&ED Claim With Your Tax Return

While it’s true that the CRA allows extended time between the submission of your income tax return and your SR&ED claim, it’s in your company’s best interest to file these forms at the same time. Income tax filers can amend their returns after submission for up to 10 years from the original notice of assessment. In contrast, you may amend your SR&ED claim only until the reporting deadline.

By filing your return and claim simultaneously, you will have 12 additional months to add projects and/or expenditures and increase your income tax credit (ITC). Any projects or expenditures added after this deadline will not be accepted by the CRA. You may not amend previous years once their reporting deadline has passed.

Additionally, submitting your SR&ED claim early allows the CRA to review your forms and information. If they identify any missing information or forms, you will receive notification in writing and have the opportunity to provide these documents and details. As long as this information is received before your SR&ED reporting deadline, it will be considered an eligible SR&ED expenditure.

The approval and payment process for SR&ED claims can be extensive. The CRA strives to process all accepted claims within 60 calendar days of receipt. This timeline, however, applies only to claims that are considered complete. If your claim is selected for a review or audit, this process should be completed within 180 calendar days. Any missing forms or information can significantly delay receipt of your refund, result in partial payment, or even cause a full denial of your claim.

Don’t Delay Your SR&ED Claim – Or Your Refund

Due to the strict timelines for claim submissions, it’s essential to avoid any omissions, errors, or missed dates that could jeopardize your SR&ED refund and the capital it provides. Yet even timely submissions require lengthy processing that can put your most important work on hold. If you need fast access to your SR&ED refund, learn more about our Capital-as-a-Service (CaaS) financing platform.

Once you get started, your company can receive its first quarterly advance in just 72 hours after approval.