Manitoba – SR&ED Tax Credits
This is the province that is situated between Ontario and Saskatchewan. The SR&ED tax credit program in this province targets development, as defined for federal purposes. The Manitoba research and development tax credit is administered by the Canada Revenue Agency (CRA).
The SR&ED tax credit in the province is non-refundable at the rate of 15% on eligible expenditures made after April 11th, 2017. Earlier, the tax credit was non-refundable at the rate of 20% on qualified expenditures made before April 12th, 2017 and after March 8th, 2005.
However, the credit is refundable for eligible expenditures incurred after 2009 pursuant to an R&D contract with an eligible institute in Manitoba. After April 11th 2017, the rate of the refundable credit was reduced to 7.5% from 10%.
In 2010, the budget extended the refundability of the Manitoba R&D tax credit to in-house R&D expenditures i.e. non-contracted work with an eligible institute in Manitoba. The refundable portion of this was 25% in 2011. From 2012 and after, this changed to 50%.
The tax credits are available to corporations and corporations that are beneficiaries of a trust and corporations that are members of a partnership with a permanent establishment in Manitoba. The SR&ED must be carried out in the province.
From January 1st, 2014, the laws were amended in regards to the definition of “eligible expenditure” so that:
- The federal reduction in the prescribed proxy amount is followed;
- The federal change to SR&ED provisions disallowing capital expenditures is not followed and;
- The federal reduction to 80% of the claimable portion of contract payments, with the exception of contract payments to eligible educational institutions in the province, which remain fully eligible is followed.
The filing deadline for claiming the credit is 1 year after the filing due date. For the non-refundable tax credits, the carry back period is 3 years while the carry forward period is 20 years for the tax years ended after 2005. For the period ending after 2003, the carry forward time is 10 years. For the tax years ending before 2004, it is 7 years.