Tax Insights: SR&ED Form T661 revised: Claim preparer information required

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Issue 2013-18

On October 31, 2013, the Canada Revenue Agency (CRA) released revised Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, which contains new Part 9 – Claim preparer information.

The revised form is required for claims filed starting January 1, 2014. The penalty for non-compliance applies in respect of claims filed on or after the later of January 1, 2014, and the day the enacting legislation (Bill C-4) receives royal assent.

Revised Form T661 responds to three developments. It:

  • accommodates the legislative changes announced in the 2012 federal budget that become effective on January 1, 2014
  • ensures consistency with the CRA consolidated policy documents released in December 2012
  • reflects the 2013 federal budget proposal that called for more detailed information about SR&ED program tax preparers and billing arrangement

Sections B and C in Part 2 of the previous form (T661 (12)) have been combined. The order of the questions in Section B has also changed. Now all claimants answer the same three questions regardless of whether Basic Research, Applied Research or Experimental Development is undertaken.

Previously, if Basic Research or Applied Research was undertaken, the claimant did not have to explain the technological uncertainties that were overcome.

This change makes the form consistent with Section 2.1.1. of the consolidated policy document on SR&ED eligibility ‘Eligibility of Work for SR&ED Investment Tax Credits Policy’ released in December 2012.

Several other minor changes to Form T661 largely reflect the 2012 and 2013 legislative changes.

The third and most noteworthy change deals with the 2013 federal budget proposal to collect more detailed information about SR&ED program tax preparers and billing arrangements.

It is reflected in Bill C-4, A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures, which received first reading on October 22, 2013.