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Research and Development Tax Credit

This credit offers tax relief to Nova Scotia corporations that incur qualified scientific research and experimental development (SR&ED) expenditures made in Nova Scotia, as defined by the federal Income Tax Act.

The credit is administered by Canada Revenue Agency (CRA) and is claimed in conjunction with federal SR&ED tax credits.

  • The Nova Scotia credit should be claimed on Schedule 340 for taxation years 1998 and later.
  • A 15 per cent rate is applicable to all corporations that incur SR&ED expenditures in Nova Scotia, regardless of size.

Eligibility:

This credit is based on qualified expenditures eligible for the federal SR&ED tax credit:

  • R&D credit applicant is advised to prepare the federal SR&ED credit filing in preparation for the provincial credit
    – Federal credit is claimed on form T661
    – Nova Scotia tax credit is claimed on schedule 340 of your Nova Scotia T2 form
  • The federal credit rules are detailed and potential claimants are advised to review federal documentation regarding the SR&ED credit