New Brunswick – SR&ED Tax Credits

Just like in most other provinces, the SR&ED tax credit in this province is administered by the Canada Revenue Agency (CRA). In New Brunswick, the tax credit is 15% refundable on eligible expenditures incurred after December 31st, 2002 and 10% non-refundable on eligible expenditures incurred before January 1^st 2003. The enhanced New Brunswick tax credit is fully refundable. This means that the credit benefits even the corporations that do not have provincial taxes owing. The amount refunded is equal to the amount of credit in excess of tax that is otherwise payable under the New Brunswick Income Tax Act. To that effect, the new credit no longer has to be carried forward or back because it is fully refundable.

The SR&ED tax credits in this province are available to corporations, corporations that are beneficiaries of a trust, and corporations that are members of a partnership, with a permanent establishment in New Brunswick.

The tax credit is applicable to eligible expenditures within the province. Eligible expenditures include:

• Experimental development – Work done to achieve technological advancement to create or improve new materials, devices, products or processes.
• Applied research – Work done to advance scientific knowledge with a specific practical application intended.
• Basic research – Work done to advance scientific knowledge without a known practical application.
• Support work – Work that directly supports the needs of experimental development, basic research and applied research.

In this province, eligible expenditures are reduced by government and non–government assistance, but not the New Brunswick SR&ED tax credit. The province’s R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified expenditures.