Nova Scotia Research and Development Tax Credit
NS, Canada
Tax credit for R&D in Nova Scotia
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|closingDateMay 17, 2024
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Professional, scientific and technical services
grant_single|grantors
- Government of Nova Scotia
- Finance and Treasury Board (NB)
grant_single|status
grant_card_status|closed
grant_single_labels|preview
Tax credit of 15% for qualified scientific research and experimental development expenditures in Nova Scotia.
grant_single_labels|projects
Activities that qualify for the Nova Scotia R&D tax credit must also qualify for the federal SR&ED investment tax credit.
- Experimental development to achieve technological advancement
- Applied research to advance scientific knowledge
- Basic research to advance scientific knowledge without specific applications
- Support work in engineering, design, operations research, and testing
grant_single|admissibleProjectsExample
$37,500
Sydney
Applying machine learning for predictive analytics in healthcare to improve patient outcomes and efficiencies
$26,250
Kentville
Creating an AI-driven platform to enhance crop yield prediction and management for local farmers
$22,500
Dartmouth
Conducting basic research on marine biodiversity to advance scientific knowledge about ocean ecosystems
$30,000
Halifax
Developing an energy-efficient solar panel prototype to advance renewable energy technologies
$45,000
Truro
Developing a modular water purification system using advanced nanotechnology to improve sustainability
$33,000
Antigonish
Developing a wearable health-monitoring device with real-time data analytics for personalized health insights
grant_single_labels|admissibility
The Nova Scotia R&D tax credit is available to corporations with a permanent establishment in Nova Scotia for scientific research carried out in the province. Eligible expenditures must qualify for the federal SR&ED investment tax credit.
- Corporations with a permanent establishment in Nova Scotia
- Corporations that are beneficiaries of a trust with a permanent establishment in Nova Scotia
- Corporations that are members of a partnership with a permanent establishment in Nova Scotia
- Engaged in scientific research carried out in Nova Scotia
- Expenditures that qualify for federal SR&ED investment tax credit
grant_eligibility_criteria|who_can_apply
The Nova Scotia R&D tax credit is available to certain types of corporations involved in scientific research in the province. These eligible companies must have a permanent establishment in Nova Scotia.
- Corporations
- Corporations that are beneficiaries of a trust
- Corporations that are members of a partnership
grant_eligibility_criteria|eligible_expenses
There are eligible expenses for the Nova Scotia R&D tax credit, which must qualify for the federal SR&ED investment tax credit.
- Eligible expenditures that qualify for federal SR&ED investment tax credit
grant_eligibility_criteria|zone
The eligible geographic zone for this grant is Nova Scotia. The grant is available exclusively to corporations with a permanent establishment in this province.
- Nova Scotia
grant_single_labels|register
- Step 1: Ensure eligibility:
- Verify that your corporation has a permanent establishment in Nova Scotia.
- Confirm that the work carried out qualifies for federal SR&ED investment tax credit.
- Step 2: Gather necessary documentation:
- Collect all records of eligible expenditures for the applicable tax year.
- Compile documentation that justifies and supports the scientific research and experimental development activities conducted.
- Step 3: Complete the required forms:
- Fill out form T2SCH340, Nova Scotia Research and Development Tax Credit.
- Step 4: File your claim:
- Submit the completed T2SCH340 form along with your corporation’s tax return.
- Ensure the submission is made within 18 months after the corporation’s tax year-end.
- Step 5: Manage assistance and adjustments:
- Ensure eligible expenditures are adjusted for any government and non-government assistance, excluding the Nova Scotia R&D tax credit.
- Understand that the Nova Scotia R&D tax credit will affect the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.
- Step 6: Recapture and renunciation:
- Be prepared for a recapture which will create or increase Nova Scotia tax otherwise payable.
- Submit a renunciation on or before six months after the corporation’s tax year-end if applicable.
grant_single_labels|otherInfo
The Nova Scotia R&D tax credit is designed to support corporations in Nova Scotia with eligible scientific research and development expenditures. The tax credit follows specific eligibility criteria and deadlines for filing, with implications on federal deductions.
- Administered by the Canada Revenue Agency
- Fully refundable at a rate of 15% of eligible expenditures
- Available to corporations, including those that are beneficiaries of a trust or members of a partnership with a permanent establishment in Nova Scotia
- Eligible expenditures need to qualify for federal SR&ED investment tax credit
- Filing deadline: 18 months after the corporation's tax year-end
- Carryback/carryforward: Not applicable
- Eligible expenditures are reduced by other forms of government and non-government assistance
- The credit reduces the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures
- Recapture of the credit will increase Nova Scotia tax otherwise payable
- Ability to renounce: On or before six months after the corporation's tax year-end
- Filing form: T2SCH340, Nova Scotia Research and Development Tax Credit
- Legislation: Section 41 of the Income Tax Act (Nova Scotia)
- Provincial website: Nova Scotia – Research and Development Tax Credit
Apply to this program
Nova Scotia Research and Development (R&D) Tax Credit
The Nova Scotia R&D tax credit is a 15% refundable tax benefit available to corporations conducting eligible scientific research and experimental development in Nova Scotia. This tax incentive is designed to support innovation and technological advancements by reducing the financial burden on businesses.
Comprehensive Guide to Nova Scotia Research and Development (R&D) Tax Credit
The Nova Scotia Research and Development (R&D) Tax Credit is a lucrative financial incentive program administered by the Canada Revenue Agency (CRA) intended to boost innovation and economic growth in the province. It provides eligible corporations with a refundable tax credit of 15% on qualifying R&D expenditures, thus enabling businesses to undertake ambitious scientific research projects and technological advancements.
Eligibility Criteria
The Nova Scotia R&D tax credit is available to a variety of entities that have a permanent establishment in Nova Scotia. This includes:
- Corporations
- Corporations that are beneficiaries of a trust
- Corporations that are members of a partnership
To be eligible, the expenses must be directly tied to scientific research and experimental development activities conducted within the province. Qualifying R&D activities generally include systematic investigations or searches carried out in a field of science or technology by means of experiment or analysis.
Eligible Expenditures
Expenditures that qualify for the Nova Scotia R&D tax credit are those that meet the criteria for the federal Scientific Research and Experimental Development (SR&ED) investment tax credit. Typical eligible expenditures include:
- Salaries and wages
- Subcontractor costs
- Materials consumed or transformed
- Overhead (indirect costs)
- Capital expenditures (only for certain specified categories)
The CRA provides detailed guidelines on what constitutes eligible SR&ED activities and expenditures, ensuring businesses can accurately assess their qualifying projects.
Application Process and Documentation
Businesses intending to claim the Nova Scotia R&D tax credit need to follow specific steps and adhere to set deadlines:
- Complete Form T2SCH340, Nova Scotia Research and Development Tax Credit.
- Submit this form along with the corporate income tax return.
The claim must be filed within 18 months after the corporation's tax year-end. Businesses are advised to maintain comprehensive documentation detailing the R&D projects, including project descriptions, objectives, hypotheses, methodologies, and results. Proper record-keeping is essential for substantiating the claim in case of a CRA review or audit.
Refundability and Impact on Federal SR&ED Tax Credit
The Nova Scotia R&D tax credit is fully refundable, which means that businesses can receive the credit as a cash refund or use it to reduce their tax liability. However, the Nova Scotia credit will reduce the pool of deductible and qualified SR&ED expenditures for the federal SR&ED tax credit. Therefore, businesses must thoughtfully coordinate their provincial and federal claims to maximize overall benefits.
Impact of Other Assistance on Eligible Expenditures
If a business receives other forms of government or non-government assistance for its R&D activities, those amounts must be deducted from the eligible expenditures. Notably, the Nova Scotia R&D tax credit itself does not need to be deducted when calculating eligible expenses for this credit. This ensures that businesses can leverage the full benefit of the provincial credit without reducing the base of eligible expenditures unduly.
Recapture Provisions
In certain circumstances, a recapture of the Nova Scotia R&D tax credit may be necessary. This could occur if the property on which the credit was claimed is disposed of or if the business ceases to meet the eligibility criteria. The amount recovered will be added to the tax otherwise payable for Nova Scotia, ensuring compliance and proper application of the tax incentives.
Renouncement Option
Corporations have the option to renounce the Nova Scotia R&D tax credit. To do so, they must formally submit a renunciation on or before six months after the corporation's tax year-end. Renouncing the credit can be strategic for businesses under specific financial or tax planning circumstances.
Conclusion
The Nova Scotia Research and Development (R&D) Tax Credit is a powerful tool for fostering innovation, encouraging R&D activities, and enhancing the economic landscape of Nova Scotia. By providing a 15% refundable tax credit, the provincial government offers substantial financial support to businesses engaged in cutting-edge research and development. Understanding the eligibility criteria, eligible expenditures, application processes, and potential impacts on federal tax credits is crucial for businesses to optimize their claims and reap the full benefits of this incentive.
For more detailed information on the legislation governing the Nova Scotia R&D tax credit, refer to Section 41 of the Income Tax Act (Nova Scotia). Businesses can also visit the provincial government’s website for official guidance and updates.
For corporations looking to leverage this tax credit, partnering with experienced grant specialists can provide critical insights and assistance in navigating the complexities of the application process, ensuring successful claims and maximized benefits.
Stay informed and up-to-date by visiting the Nova Scotia Finance Government Website for the latest information and resources regarding the R&D tax credit program.