Alberta SR&ED Tax Credits Up to 48%
Combine the federal SR&ED credit with the Alberta Innovation Employment Grant (IEG) to maximize your R&D tax recovery in Alberta.
Alberta Innovation Employment Grant (IEG)
Alberta's R&D incentive is the Innovation Employment Grant (IEG): a grant delivered through the corporate tax system that pays 8% on eligible R&D spending up to your base spending level and an enhanced 20% on spending above it, on up to $4M of annual R&D spend. It replaced Alberta's former SR&ED tax credit in 2021, and the framing matters — it's a grant claimed on Schedule 29 of your Alberta AT1 return, not a classic tax credit, and the program explicitly targets small and medium-sized firms in their earlier stages, when they might not yet be profitable. Your base spending level is your average qualifying R&D spend over the previous 2 years, so only growth above your own recent trend earns the 20% rate. Because the CRA treats the grant as government assistance that reduces the federal expenditure base, the effective combined rate with the federal enhanced 35% is roughly 40.2% at the base tier and roughly 48% on above-base spending — never the additive 43% or 55% (illustrative; exact interaction depends on your expenditure mix). Calgary and Edmonton are home to growing tech ecosystems, particularly in energy tech, agri-tech, and AI.
Grant Rate
8% (up to base spending level) / 20% (above base)
Base Spending Level
Average qualifying R&D spend over the previous 2 years
Expenditure Limit
Benefits on up to $4M in annual R&D spending
Effective Combined Rate (CCPC)
≈40.2% base / ≈48% above-base (after federal grind, illustrative)
Effective Combined Rate (Non-CCPC)
≈22% base / ≈32% above-base (after federal grind, illustrative)
Phase-Out
$10M–$50M taxable capital; ineligible at $50M+
Format
Grant delivered through the corporate tax system (AT1 Schedule 29)
Federal + AB Credit Stacking
Here's how the credits combine for a CCPC with $500,000 in eligible R&D salaries.
Enhanced rate for CCPCs, applied to the base net of the provincial credit
Refundable
Effective rate: ≈40.2% (base tier — illustrative)
This example uses salaries only. Including contractor costs (at 80%) and materials would increase the total. Overhead (55% proxy) is added automatically. Use our calculator for a detailed estimate.
How to Claim the AB Credit
The forms, schedules, and deadlines you need to capture the Alberta Innovation Employment Grant (IEG).
Form
Schedule 29 to the Alberta Corporate Income Tax Return (AT1). There is no formal application process — the IEG is delivered through the corporate tax system and claimed when you file your annual Alberta return.
Schedule
AT1 Schedule 29, filed in addition to the AT1 for the taxation year. Your federal SR&ED claim (Form T661 plus Schedule T2SCH31 with your T2) still has to be filed separately with the CRA — the IEG rides on it.
Deadline
Alberta's IEG page doesn't publish a separate deadline; Schedule 29 is filed with your AT1 for the taxation year. In practice the federal SR&ED reporting deadline governs the whole claim — T661 and Schedule T2SCH31 are due 18 months after your fiscal year end, with no extensions — because IEG payments aren't processed until the CRA has verified your qualifying expenditures.
- 1Confirm you qualify: R&D carried out in Alberta, expenditures incurred in Alberta after December 31, 2020, and taxable capital under $50M (the grant phases out from $10M).
- 2Prepare your federal SR&ED claim — Form T661 and Schedule T2SCH31 filed with your T2 — since IEG-eligible expenditures must match those that qualify federally.
- 3Calculate your base spending level (your average qualifying R&D spend over the previous 2 years) to split the year's spending into the 8% and 20% tiers.
- 4Complete AT1 Schedule 29 and file it together with your Alberta AT1 return for the taxation year.
- 5Keep supporting documentation per Alberta's Guide to Claiming the Innovation Employment Grant — Tax and Revenue Administration confirms the work was undertaken in Alberta.
- 6Expect payment only after the CRA verifies your qualifying SR&ED expenditures; the IEG is not processed ahead of the federal review.
Alberta Eligibility Requirements
- Available to corporations that undertake R&D in Alberta
- The IEG is a grant delivered through the corporate tax system, not a classic tax credit — you claim it on your Alberta corporate return, and the program targets firms that may not yet be profitable
- 8% rate applies up to your base spending level — your average qualifying R&D spend over the previous 2 years
- 20% rate applies to eligible spending that exceeds your base spending level, with benefits on up to $4M in annual R&D spend
- Eligible expenditures must be incurred in Alberta after December 31, 2020 and match those that qualify for the federal SR&ED program
- The grant phases out incrementally between $10M and $50M in taxable capital; firms with $50M or more are not eligible
Important: Provincial credits are claimed on your Alberta corporate tax return, separate from your federal T661 filing with the CRA. Ensure you file both to capture the full combined benefit.
Other Alberta R&D Incentives
Beyond SR&ED, Alberta offers additional programs that can be stacked with your tax credits.
Alberta Innovates
Alberta's primary research and innovation agency. Provides grants, vouchers, and funding programs for R&D across clean tech, digital health, AI, and smart agriculture — separate programs from the IEG, which is claimed through the tax system.
Alberta Enterprise Corporation
Invests in venture capital funds that support Alberta-based technology companies at seed and early stages.
Emissions Reduction Alberta (ERA)
Funds clean technology innovation projects that reduce greenhouse gas emissions. Relevant for clean tech companies doing SR&ED-eligible work.
Who Should Think Twice
SR&ED isn't the right fit for everyone. Skip the claim if any of these describe you.
- Your taxable capital is $10M or more: the grant phases out incrementally between $10M and $50M, and at $50M or more you are not eligible at all — model the phase-out before counting on the headline rates.
- Your annual R&D spend is well above $4M: the IEG only pays benefits on up to $4M of annual R&D spending, so the excess earns nothing provincially (the federal credit still applies on its own terms).
- Your R&D spend is flat or shrinking: the 20% rate only applies above your base spending level — the average of your previous 2 years — so steady spenders earn mostly the 8% rate, not the 20% headline.
Maximize Your Alberta SR&ED Credits
Glauq automates your federal and Alberta provincial SR&ED claims — ensuring you capture every eligible dollar across both programs.
Alberta SR&ED FAQ
What is the Alberta Innovation Employment Grant?
The IEG is Alberta's R&D incentive, which replaced the province's former SR&ED tax credit in 2021. It pays a grant of 8% on eligible R&D spending carried out in Alberta up to your base spending level, and an enhanced 20% on spending above that base, with benefits on up to $4M in annual R&D spend. Eligible expenditures must match those that qualify for the federal SR&ED program.
How do I claim the IEG — is there an application?
There is no formal application process. The IEG is delivered through the corporate tax system: you claim it by completing Schedule 29 to the Alberta Corporate Income Tax Return (AT1) and filing it with your AT1 for the taxation year. Payments are not processed until the CRA has verified your qualifying SR&ED expenditures and Alberta's Tax and Revenue Administration confirms the work was undertaken in Alberta.
What counts as my base spending level?
Your base spending level is your average qualifying R&D spending over the previous 2 years. Spending up to that base earns the 8% rate; only spending above it earns the enhanced 20% rate. The split is company-specific, not a fixed dollar threshold, so a company with flat year-over-year R&D spend earns mostly 8%, while a company ramping its R&D captures the 20% rate on the growth.
Is there a cap on how much the IEG pays?
The grant provides benefits on up to $4M in annual R&D spending — lower than the federal $6M expenditure limit. It also phases out incrementally for firms with between $10M and $50M in taxable capital, and firms with $50M or more in taxable capital are not eligible.
Can I stack the IEG with the federal SR&ED credit?
Yes, with one interaction to know: the CRA treats the IEG as government assistance, so it reduces the expenditure base your federal credit is calculated on. A CCPC with $500K of eligible Alberta spending at the base rate would receive $40K from the IEG (8%) plus $161K federal (35% of the remaining $460K) — $201,000 combined, roughly 40.2% effective. Above-base spending at 20% pushes the combined rate to roughly 48%, not the additive 55%. These figures are illustrative; the exact interaction depends on your expenditure mix.
Does the IEG pay out if my company isn't profitable yet?
The IEG is a grant rather than a credit against tax payable, and Alberta designed it to complement the Job Creation Tax Cut by supporting small and medium-sized firms in the earlier stages of operation, when they might not yet be profitable. You still claim it through your Alberta corporate return via AT1 Schedule 29, and payment follows CRA verification of your qualifying SR&ED expenditures.