Filing Late – Will it Impact SR&ED?
The Scientific Research and Experimental Development (SR&ED) tax incentives aim to foster research and development in Canada. Corporations, individuals, trusts, and partnerships conducting eligible SR&ED work may claim SR&ED tax incentives for the year if they file on time 1. However, filing late does occur; this article explores the difference between the corporate tax filing deadline and the SR&ED reporting deadline, and the potential impact that filing corporate taxes late may have on your final SR&ED investment tax credits (ITCs).
SR&ED Deadlines – Filing Deadline (Flexible) vs. Reporting Deadline (Firm)
Tax Filing Deadline (Flexible)
Corporate tax returns are due within six months of the end of a company’s fiscal year; businesses must file by this deadline to avoid interest and penalties. If a company’s fiscal year-end is the last day of the month, the corporate tax return is due on the last day of the sixth month following the fiscal year-end.
For example, if the fiscal year is from July 1st, 2023, through June 30th, 2024, the corporate tax return is due on December 31st, 2024.
When the last day of the fiscal year is not the last day of a month, the corporate tax return should be filed by the same day of the sixth month following the fiscal year-end. 2.
If the filing deadline falls on a weekend or public holiday, it is automatically extended to the next business day. Changes to corporate tax returns can typically be requested within three to four years from the original assessment.
Considerations for Submitting SR&ED Claims After the Tax Filing Deadline.
Corporations must file their returns yearly, and the CRA applies monetary penalties to late corporate tax returns if money is owed. After the filing due date, the CRA begins to apply these penalties. The penalty for filing corporate tax returns past the filing deadline varies based on whether it is your first time filing late, if your corporation has received a demand to file from the CRA, or if they have received a failure to file a penalty in the last 3 years. 34
Since taxpayers, including corporations, may apply their available ITCs in the year to reduce their taxes owing, the penalties incurred for filing their tax return late may be able to be covered by the SR&ED ITCs received 5. Remember that the higher the taxes owed for the year, the lower the final receivable SR&ED ITCs will be as your SR&ED ITCs will offset your taxes owed.
This means that filing corporate taxes late incurs no penalty if you are expecting a refund and can provide some benefits. A good consultant can help you determine your anticipated SR&ED claim and whether filing your corporate taxes later may be beneficial.
Remember, you cannot claim SR&ED until your corporate taxes are filed, but you can file your taxes without SR&ED and amend at a later date (before the reporting deadline).
To recap, you can file after the tax filing deadline in one of two ways:
- File T2s + SR&ED forms late, but together – this can be beneficial if you believe your anticipated ITCs will exceed any taxes owing.
- File T2s, then amend with SR&ED forms at a later date. This can be beneficial if your taxes are otherwise ready to be filed and it is required due to other business requirements.
Note: in both cases, all SR&ED forms must be filed prior to the reporting deadline.
SR&ED Reporting Deadline (Firm)
The SR&ED reporting deadline, including ITCs, is 12 months after the corporate tax return filing due date (the 18-month reporting deadline). It’s important to note that SR&ED claims cannot be altered after this deadline. Businesses conducting scientific research and experimental development can file their SR&ED claims with their corporate tax returns and amend those claims until the 18-month reporting deadline but not after. To be eligible for the SR&ED tax incentives, you must file your corporate tax return before or at the same time as the SR&ED tax forms – i.e. you cannot file your SR&ED forms before you file your corporate tax return.
Yearly corporate tax returns must be filed regardless of how late they are. The amended SR&ED reporting deadlines are the last date the CRA will accept a taxpayer’s SR&ED return; if you fail to file your corporate tax return or SR&ED claim before the 18-month reporting deadline, you will be unable to claim your SR&ED ITCs for that fiscal year. We previously discussed the SR&ED filing deadlines in our article “Can you apply for the SR&ED tax credit past the filing deadline?“.
Considerations for Submitting after the Reporting Deadline.
SR&ED ITCs cannot be claimed or amended once that 18-month reporting deadline has passed. There have been several Tax Court of Canada rulings around the importance of filing before the reporting deadline (18-months), which we’ve outlined on our Legal Rulings page.
Even when the delays are caused by the CRA, there is no leniency.
Examples
Utilize this table to ensure that you submit your corporate tax returns and SR&ED claim on time:
| Fiscal Year End | 6-Month Deadline | 18-Month Deadline |
| Jan 31, 2024 | Jul 31, 2024 | Jul 31, 2025 |
| Feb 29, 2024 | Aug 31, 2024 | Aug 31, 2025 |
| Mar 31, 2024 | Sept 30, 2024 | Sept 30, 2025 |
| Apr 30, 2024 | Oct 31, 2024 | Oct 31, 2025 |
| May 31, 2024 | Nov 30, 2024 | Nov 30, 2025 |
| Jun 30, 2024 | Dec 31, 2024 | Dec 31, 2025 |
| Jul 31, 2024 | Jan 31, 2025 | Jan 31, 2026 |
| Aug 31, 2024 | Feb 28, 2025 | Feb 28, 2026 |
| Sept 30, 2024 | Mar 31, 2025 | Mar 31, 2026 |
| Oct 31, 2024 | Apr 30, 2025 | Apr 30, 2026 |
| Nov 30, 2024 | May 31, 2025 | May 31, 2026 |
| Dec 31, 2024 | Jun 30, 2025 | Jun 30, 2026 |
Recap: 6 months vs. 18 months
SR&ED claim deadlines depend on the type of business or entity filing the claim; however, the vast majority of SR&ED claims we see are from Canadian-controlled private corporations (CCPC), which have a tax filing due date of six months after the end of the fiscal year; this means their SR&ED filing deadline is 18 months after that.
After 18 months, the tax credits are no longer accessible. It is therefore imperative that all SR&ED schedules are filed prior to the reporting deadline. When you file does not impact the processing timelines at the CRA.
More details on filing and reporting deadline are located in SR&ED Filing Requirements Policy – Canada.ca
So, can you file SR&ED late?
In some cases, it may be beneficial to file your corporate taxes late as the penalties incurred by filing late may be offset by your company’s SR&ED ITCs, making those extra few days of preparation worth it; just be sure to weigh the risks of filing late; however, you cannot submit a claim for SR&ED past the reporting deadline (18-months after FYE). Ensure that you are aware of your deadlines and avoid the rush to file on time, as this is when errors can occur.