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The United States Federal Credit for Increasing Research Activities and the Canadian Scientific Research and Experimental Development Tax Incentive Program, or SRED, are tax incentives often overlooked by many qualifying companies. Typically, when people hear the phrase “research and development,” they immediately think their company does not qualify for this credit and that the credit is reserved for bellwether companies or organizations such as Microsoft, Boeing, Intel, Lockheed Martin, Merck, Pfizer, etc. This assumption is, in fact, wrong. When compared to the “traditional” definition of R&D, the tax definition of “research and development” is quite broad in terms of the types of activities and costs that qualify for these powerful government-sponsored tax incentives. We will discuss what types of companies, activities and costs qualify for the R&D credit and, hopefully, you will be able to determine whether your company is a good candidate for the United States R&D Credit or the Canadian SRED Credit. [more]
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