G6 Consulting Inc Canada's R&D Tax Credit Experts
CRA Confirms CEWS Claw Back on SRED Funding
Breaking News: CEWS Claws Back SR&ED funding
The CRA on February 25th confirmed that CEWS payments claw back SRED funding.
Prior to this guidance, the CRA had stated last June that CEWS was deemed to be government assistance. You had to be knowledgeable in SRED regulations to know that government assistance payments, whether IRAP or provincial SRED credits, mean clawbacks for SRED funding. Non-government assistance, most commonly subcontract payments where the other party is claiming SRED, mean clawbacks as well.
Here is the government guidance announcement about CEWS.
The guidance goes through an example for a single SRED practitioner where CEWS subsidies are deducted only to the extent that they overlap the SRED expenditures claimed by that practitioner in a given period. This example affirms the approach of the G6 Consulting CEWS-SRED software whereby the minimum CEWS deduction is calculated company-wide by matching CEWS subsidies to SRED expenditures by SRED practitioner by month.
Here is our webpage describing the CEWS-SRED clawback problem and our solution. It also has 3 company examples illustrationg the savings possible using G6’s CEWS-SRED software.
Contact G6 to learn how we can reduce the impact of CEWS clawback on your FY20 and FY21 SRED funding to the legal minimum. Our software can save you tens to hundreds of thousands of dollars on your SRED claims.