G6 Consulting Inc Canada's R&D Tax Credit Experts
How Long Does it Take to Get my SR&ED Refund
The first thing to know is that SRED credits are earned in arrears. SRED credits are administered by the CRA, and SRED rules adhere to the same general filing rules as corporate T2 submissions. So, this means that you incur all project and SRED expenses for your fiscal year, then you claim the SRED expenses as part of your T2 filing. Just as with your personal taxes, when you expect a refund, hurry up and file your T2. If you owe money, you have six months after your corporate year end to file your taxes and not be penalized with late fees.
How long until I get my SR&ED money?
First-time filers: 120 days from filing
Past SRED filers: 16 to 67 days after filing.
SRED Timeline for First-Time Filers
Let’s say you are a first time SRED filer with a Dec 31 corporate year end. You speed along your tech, SRED and accounting people and file your T2 + SRED on March 15. When will your SRED refund arrive? For first time SRED claimants, we are shooting to achieve FTCAS status for the claim. You can find more detail on FTCAS here: https://www.g6consulting.ca/sred-ftcas/. FTCAS is the fastest route to get your SRED money for a first-time filer. It’s much speedier than a full review which is the other route for processing a first-time claim.
If your file receives FTCAS approval, you will receive a phone call from the CRA to schedule a FTCAS meeting. This phone call will typically occur about 60 days after your claim is filed, so we are at May 15. This assumes you e-filed your T2 + SRED. Add two weeks if you paper filed.
Strangely, the government won’t mention it in your phone call or follow-up FTCAS letter, but your claim has been accepted as filed as soon as you receive FTCAS status! Your claim will be paid out as submitted, after you participate in the mandatory FTCAS meeting and follow-up. The FTCAS meeting is scheduled for two weeks out so we are now at June 1.
It’s June 1 and we’ve just gone through the FTCAS meeting. G6 coached us on what to expect and the meeting went smoothly. The stated purpose of the FTCAS meeting is to educate the taxpayer on the technical and financial elements that make up an excellent claim. The CRA will sometimes point out deficiencies in the current claim as a training tool to improve your future claims. The unstated purpose of the meeting is to perform a risk assessment on the taxpayer and his claimed work to assign a weight on the likelihood of future year reviews.
The takeaway from an FTCAS meeting is a report written jointly by the CRA tech and financial reviewers called an FTCAS report. The delivery time for this report varies, but let’s take an average delivery time, 3 weeks. We’re now at June 21. In the background, as the FTCAS is delivered to the taxpayer, the CRA financial reviewer is sending your SRED + FTCAS file to the CRA head office for processing and payout.
Processing of FTCAS claims is variable, but let’s say we’re in busy season and it takes 3 weeks for processing. Assuming you are organized, and you are signed up for CRA direct deposit, it’s July 15th and today you received a direct deposit for the full amount of your SRED claim! Elapsed time, 120 days since submission. Add another two weeks if you are waiting for a Government of Canada cheque. And sign up today for direct deposit so that next year’s claim is not delayed!
SRED Timeline for Non First-Time Filers
Let’s say you and your company are old hands at filing SRED claims. Now how long does it take to get your money? There are two common timelines, assuming your claim isn’t selected for a full review.
Scenario one, your claim receives fast approval. You file your claim, March 15th, as above. On March 19th, you check on CRA MyAccount and you see that there is an assessment scheduled for March 24th. Sure enough, on March 24th, you download an assessment from MyAccount which says your SRED claim has been Accepted as Filed (AAF)! Great news. As you are an old hand, the assessment states that your refund will be deposited with the business bank account on file in due course. Elapsed time, 9 days. You go to the Account Balance section of MyAccount, and you see there that you have a refund scheduled for March 31st! Sure enough, on March 31st, you receive a direct deposit for the full amount of your claim. Elapsed time: 16 days.
Scenario two, your claim receives delayed approval. In this scenario, the government waits 55 days before there is notice in MyAccount that your claim is being approved. Add the usual follow-on steps as described in Scenario 1 above. That results in a direct deposit arriving in your account on May 22. Elapsed time since filing: 67 days.