Manitoba Research and Development
Tax Credit (Provincial SR&ED)
Receive Retroactive Research Tax Credits on R&D Projects.
The Manitoba (MB) Research and Development Tax Credit is the Manitoba provincial variant of the Canadian federal Scientific Research and Experimental Development (SR&ED) program. Businesses eligible to apply for the federal SR&ED program may also be eligible to apply for funding through the Manitoba provincial SR&ED program. Funding through the federal and provincial programs can be stacked.
Funding Amount
Depending on a corporation’s circumstances, they may be eligible for a refundable or non-refundable tax credit worth up to 15% of qualifying expenditures.
Eligible Applicants
Corporations or partnerships with a permanent establishment in Manitoba performing approved SR&ED activities in this province.
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Manitoba Research and Development Tax Credit (SR&ED)
Amount of Tax Credits
The Manitoba R&D tax credit follows the federal SR&ED rules for eligible activities:
- Corporation’s may earn a Investment Tax Credit (ITC) at the rate of 15% on qualified SR&ED expenditures.
- One half of the tax credit (7.5%) is refundable, the rest (7.5%) is non-refundable.
- The tax credit is fully refundable where the R&D is carried on in Manitoba under R&D contract with a qualifying institute (eg. Universities, Research centres)
- The MB R&D tax credit is considered government assistance and will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.
Any unused portion of the tax credit may be carried back 3 tax years and/or carried forward 20 tax years.
Manitoba Research and Development Tax Credit (SR&ED)
Eligible Applicants
The Manitoba R&D tax credit is available to corporations and partnerships that have a permanent establishment in Manitoba. The eligibility requirements for the program require that the business is eligible for tax credits through the federal SR&ED funding program:
- Corporations, including coprorations that are active members of partnerships (other than specified members) and corporations that are beneficiaries of a trust, performing either basic research, applied research, or experimental development in Manitoba; and
- Applicants should be developing new products, processes, or making incremental improvements to them.
- Expenditures incurred by an individual do not qualify.
Manitoba Research and Development Tax Credit (SR&ED)
Eligible Expenditures
The Manitoba R&D tax credit follows the federal SR&ED rules for eligible activities and expenses, with the addition of allowing Capital expenditures. Below are expenses that the business can get funded through the MB R&D funding program. The MB R&D Tax Credit can be stacked with the federal SR&ED funding program:.
- Labour: Based on time spent on eligible activities in Manitoba.
- Contractors: Portion of contract related to SR&ED performed on the business’ behalf. Must be a Canadian contractor and work must be performed within the province of Manitoba.
- Materials: Materials can be purchased from outside Manitoba but must be used in the prosecution of SR&ED in Manitoba.
- Capital: expenditures for depreciable property (other than a building or a leasehold interest in a building) and first term and second term shared‑use‑equipment
- Third Party Payments: Payments (money or in-kind) to an entity to carry on SR&ED in the province of Manitoba.
Overhead: Calculated using the Proxy (Quick) or Traditional (Detailed) method.
Manitoba Research and Development Tax Credit (SR&ED)
Program Deadlines
The Manitoba R&D tax credit claim must be submitted within one year after the tax return filing deadline (i.e. 18 months after a corporation’s tax year end), and is contingent on qualifying for the federal SR&ED ITC.
To determine whether your Manitoba business is eligible for benefitting through the Scientific Research and Experimental Development (SR&ED) tax credits, consider speaking with the Mentor Works team of Canadian government funding experts.
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