Developments: Alberta’s SR&ED changes clarified

Discussions between PricewaterhouseCoopers LLP (PwC) and Alberta Tax and Revenue Administration (ATRA) officials clarify recent changes to Alberta’s scientific research and experimental development (SR&ED) tax credit. These changes not only affect future SR&ED claims in Alberta, but also mean that previous SR&ED claims will have to be amended. This could trigger a tax refund or tax liability for previous years.

A welcome proposal in Alberta’s February 9, 2012 budget eliminated the SR&ED “grind.” Specifically, for taxation years ending after March 31, 2012, taxpayers are no longer required to deduct the federal SR&ED tax credit when calculating Alberta’s SR&ED tax credit. Subsequently, Alberta announced in a “Special notice” dated June 2012, that additional technical changes would be effective retroactive to January 1, 2009 (i.e., the start of Alberta’s SR&ED program).