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SR&ED and Québec R&D tax credits in a financial projection

Updated November 9, 2026

Refundable tax credits can fund a large share of a Québec SMB's R&D. But they arrive late: placing them correctly in the financial projection keeps you from overstating cash.

The main credits

Starting rates for 2026 (reference points updated November 7, 2026), to be confirmed with your CPA: programs change every year.

  • Federal SR&ED, Canadian-controlled private corporation (CCPC): 35% refundable up to $6M of expenditures a year, 15% non-refundable above it or for other corporations. Proxy method: 55% of R&D salaries instead of actual overhead. Third-party contracts: 80% eligible.
  • CRIC (research, innovation and pre-commercialization, Québec): 30% refundable on eligible expenses above an exclusion threshold of at least $50,000, up to $1M, then 20%. Base: salaries, 50% of subcontracting in Québec and equipment. It replaces the former R&D credits for tax years beginning after March 25, 2025.
  • CDAE (e-business, Québec): 30% of eligible IT salaries, 22 points of which are refundable in 2026, 21 in 2027 and 20 from 2028, with a certificate from Investissement Québec and activity conditions.

When the money arrives

A refundable credit is received after the tax return is filed, 4 to 12 months after year-end. It doesn't fund R&D while the work is being done. In the financial projection, the credit is recorded in the year the expenses are incurred, but it enters the cash budget in the month it is received. A bridge loan on tax credits can cover the gap.

In the cash budget, the credit comes in the month it is received, not during the year of the spending. The 4- to 12-month delay comes from our reference points of November 7, 2026: confirm it with your CPA.

What qualifies

SR&ED requires technological uncertainty, a systematic approach and documented technological advancement. Developing routine features generally doesn't qualify. Government assistance, such as IRAP, often reduces the eligible base of the credits.

General planning reference points, not tax or accounting advice. Confirm rates and amounts with your CPA and the program before filing anything.

With Orbinance

SR&ED, Québec R&D and CDAE credits are preset in Orbinance. They are calculated on the eligible salaries and expenses in your projection, recorded in the year of the expenses and received the following year.

Tax credits and grants are never counted as sales: they appear in the financial statements and in cash in the right month.

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Sources

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