Please remember this is a user-to-user community that relies on member participation. We encourage you to ask questions AND share your own thoughts, experience and advice.
To calculate Federal Tax credit, we have to deduct Govt Assistance for Ontario and to calculate ontario tax credit, we have to deduct federal govt assitance for SR&ED credit. its a iteration problem.
Can anybody help profile helps deal with it.
Regards,Balbir
Page 1 of 1
Calcualtion of SR&ED Tax Credit
MultiQuote
#2
Pablo85 
- New Member
-
- Group: Members
- Posts: 9
- Joined: 30-August 09
Posted 21 September 2009 - 05:14 PM
Balbir,
You have to calculate the provincial amounts first which are OITC from Sched 566 and ORDTC from Sched 508. These amounts are then used in T661 (and Sched31) as they reduce the eligible expenditures for the federal tax credit (even though you have not received them yet, they are assumed and therefore reduce expenditures).
The lines in the provincial forms for federal assistance do not include SRED assistance so you can calculate them first.
--Pablo
You have to calculate the provincial amounts first which are OITC from Sched 566 and ORDTC from Sched 508. These amounts are then used in T661 (and Sched31) as they reduce the eligible expenditures for the federal tax credit (even though you have not received them yet, they are assumed and therefore reduce expenditures).
The lines in the provincial forms for federal assistance do not include SRED assistance so you can calculate them first.
--Pablo
Balbir_CA, on Sep 15 2009, 03:25 PM, said:
To calculate Federal Tax credit, we have to deduct Govt Assistance for Ontario and to calculate ontario tax credit, we have to deduct federal govt assitance for SR&ED credit. its a iteration problem.
Can anybody help profile helps deal with it.
Regards,Balbir
Can anybody help profile helps deal with it.
Regards,Balbir
#3
Balbir_CA
- New Member
-
- Group: Members
- Posts: 5
- Joined: 31-October 07
Posted 22 September 2009 - 01:50 PM
Hi Pablo
Thank you Pablo. I am sure if you are on Linkedin.com, but we have a SR&ED Canada group there, which you may wish to join.
Regards, Balbir Singh
Thank you Pablo. I am sure if you are on Linkedin.com, but we have a SR&ED Canada group there, which you may wish to join.
Regards, Balbir Singh
Pablo85, on Sep 21 2009, 10:14 AM, said:
Balbir,
You have to calculate the provincial amounts first which are OITC from Sched 566 and ORDTC from Sched 508. These amounts are then used in T661 (and Sched31) as they reduce the eligible expenditures for the federal tax credit (even though you have not received them yet, they are assumed and therefore reduce expenditures).
The lines in the provincial forms for federal assistance do not include SRED assistance so you can calculate them first.
--Pablo
You have to calculate the provincial amounts first which are OITC from Sched 566 and ORDTC from Sched 508. These amounts are then used in T661 (and Sched31) as they reduce the eligible expenditures for the federal tax credit (even though you have not received them yet, they are assumed and therefore reduce expenditures).
The lines in the provincial forms for federal assistance do not include SRED assistance so you can calculate them first.
--Pablo
#4
Pablo85
- New Member
-
- Group: Members
- Posts: 9
- Joined: 30-August 09
Posted 23 September 2009 - 04:23 PM
Balbir_CA, on Sep 22 2009, 09:50 AM, said:
Hi Pablo
Thank you Pablo. I am sure if you are on Linkedin.com, but we have a SR&ED Canada group there, which you may wish to join.
Regards, Balbir Singh
Thank you Pablo. I am sure if you are on Linkedin.com, but we have a SR&ED Canada group there, which you may wish to join.
Regards, Balbir Singh
thanks. I'm an engineer, not an accountant but probably worth joining.
Btw, one more idiosyncrasy of the SRED programs is that the ORDTC is not a true tax credit (at least by my definition) because it is subtracted from net income rather than a pure credit, so more like a deduction than a credit. If net income is negative, you can elect to not claim all or part of the ORDTC since it if you claim it your expenditures are reduced, reducing your federal credit which is 35% of expenditures, yet there is no increase in credit/refund since you're not reducing tax payable on negative net income. Seems to be a bug in Profile in this regard, as claiming none of the ORDTC doesn't preclude it from the "less provincial assistance" lines.
--Pablo
Page 1 of 1