Saskatchewan’s 2026-27 Budget includes enhancements to Saskatchewan’s Research and Development (R&D) Tax Credit, aligning with the proposed federal changes to the Scientific Research and Experimental Development (SR&ED) program for tax years that begin on or after December 16, 2024. Pending passage of federal legislation, the impacts to Saskatchewan’s R&D Tax Credit are as follows:
- Increasing the eligible expenditure amount for the refundable R&D tax credit limit from $1 million to $2 million.
- Restoring eligibility of capital expenditures for Saskatchewan R&D expenditures.
The Saskatchewan Research and Development (R&D) Tax Credit is designed to encourage private-sector R&D investment in Saskatchewan. It is available in respect to qualifying R&D expenditures incurred by corporations in Saskatchewan.
- Qualifying R&D expenditures by Saskatchewan Canadian-controlled private corporations (CCPCs) will be eligible for a 10 per cent refundable R&D tax credit for the first $1 million in annual qualifying expenditures made after March 31, 2017;
- Qualifying R&D expenditures in excess of the annual limit, as well as qualifying expenditures by other corporations are eligible for a 10 per cent non-refundable R&D Tax Credit;
- The total refundable and non-refundable R&D Tax Credits that may be claimed by a corporation will be limited to $1 million per year;
- Tax Credit legislation can be found in Section 63.4 of The Income Tax Act, 2000.
To claim this tax credit, you will need to complete Schedule 403, which can be obtained from the Canada Revenue Agency (CRA). Submit this schedule to CRA when you file annual Saskatchewan corporate income tax return.