Filing for SR&ED in Ontario can help companies get support for their research and development work. However, mistakes in the SR&ED claim process can lead to delays or even rejections. Below are five errors that should be avoided during the Ontario SR&ED application process.
Not Understanding Eligible Activities
Many companies miss out because they need clarification about which activities qualify. For instance, the activities that should qualify for such exemptions should be about a science or technology innovation or solving a specific issue.
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Research and Development Scope
Make sure your project involves genuine R&D activities. Only specific work qualifies under the Ontario SR&ED program.
Missing Key Deadlines
Late applications are a common problem. Ontario SR&ED claims must be filed within 18 months of the tax year-end.
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Set a Filing Reminder
Setting reminders for SR&ED deadlines can prevent missed opportunities.
Incomplete Documentation
With proper documentation, SR&ED claims may avoid issues. Each project needs records that detail the work done, challenges faced, and solutions found.
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Keeping Detailed Records
Save all related documents, including reports, test results, and financial records. These will support your SR&ED claim.
Incorrect Cost Reporting
Reporting costs incorrectly may result in errors in your SR&ED claim. Costs should only include what was spent on qualifying activities.
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Focus on Accurate Cost Allocation
Ensure all expenses are directly related to SR&ED work. Double-check figures before filing.
Not Consulting an Expert
Ontario SR&ED rules can be complex. Seeking guidance helps avoid common errors and ensures that your SR&ED claim is strong.
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Seeking Professional Help
Consult someone familiar with SR&ED regulations in Ontario to increase the chances of a successful claim.
Conclusion
The following are some of the mistakes a company should avoid when filing for the Ontario SR&ED tax credit. By understanding the rules, keeping records, and filing on time, companies can make the most of the Ontario SR&ED program for their R&D needs.