British Columbia SR&ED Tax Credits Up to 41.5%
Combine the federal SR&ED credit with the BC SR&ED Tax Credit to maximize your R&D tax recovery in British Columbia.
BC SR&ED Tax Credit
The BC SR&ED tax credit is a 10% provincial tax credit on qualified SR&ED expenditures incurred in British Columbia — refundable for CCPCs and eligible Canadian public corporations up to the federal expenditure limit (now $6 million), and non-refundable for other qualifying corporations. BC Budget 2026 made the credit permanent, adopted the federal SR&ED changes, and extended refundable eligibility to eligible Canadian public corporations (ECPCs) for tax years beginning on or after December 16, 2024. Because the CRA treats provincial credits as government assistance that reduces the federal expenditure base, the effective combined rate with the federal enhanced 35% is roughly 41.5% — not the additive 45% — and that combined math is illustrative, since the exact interaction depends on your expenditure mix and proxy treatment. You claim the credit on Form T666 filed with your T2, so there is no separate provincial application process to manage.
Provincial Credit Rate
10%
Refundable
Yes (CCPCs and eligible Canadian public corporations, up to the federal expenditure limit)
Expenditure Limit
Tracks the federal limit ($6M for tax years beginning on or after Dec 16, 2024)
Effective Combined Rate (CCPC)
≈41.5% (after federal grind, illustrative)
Effective Combined Rate (Non-CCPC)
≈23.5% (after federal grind, illustrative)
Carry Forward / Back (Non-refundable)
10 years / 3 years
How to Claim
Form T666 with the T2; Schedule 5 lines 674 / 659
Federal + BC 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: ≈41.5%
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 BC Credit
The forms, schedules, and deadlines you need to capture the BC SR&ED Tax Credit.
Form
Form T666 (British Columbia Scientific Research and Experimental Development Tax Credit), filed with your T2 Corporation Income Tax Return
Schedule
Schedule 5 (Tax Calculation Supplementary – Corporations): refundable credit on line 674, non-refundable credit on line 659
Deadline
No later than 18 months after the end of the tax year in which the qualified expenditures were incurred — the same hard deadline as the federal SR&ED reporting deadline, with no extensions
- 1Confirm you have a permanent establishment in BC and isolate the BC-attributable share of your SR&ED expenditures — a distributed team's out-of-province work does not count provincially.
- 2Prepare your federal claim first: Form T661 and Schedule T2SCH31 filed with your T2, since the BC credit is calculated on the same qualified expenditure base.
- 3Complete Form T666 to calculate the 10% BC credit — refundable up to the federal expenditure limit for CCPCs and eligible Canadian public corporations, non-refundable on the excess.
- 4Enter the refundable credit on line 674 and any non-refundable credit on line 659 of Schedule 5 of your T2 return.
- 5Deduct the BC credit as government assistance on your federal claim — it reduces the qualified expenditures the federal 35% applies to, which is why the combined rate is roughly 41.5%, not 45%.
- 6File everything no later than 18 months after your tax year end. The CRA cannot grant extensions, and a late T666 leaves the refundable 10% permanently unclaimed.
British Columbia Eligibility Requirements
- Must have a permanent establishment in British Columbia — per the CRA's assistance policy, only Quebec's credit works without a PE in the province where the R&D is performed
- The 10% rate applies to SR&ED qualified BC expenditures; eligibility follows the federal SR&ED definitions (technological advancement, uncertainty, systematic investigation)
- Refundable for CCPCs — and, since BC Budget 2026, eligible Canadian public corporations — for tax years beginning on or after December 16, 2024, up to the federal expenditure limit
- Expenditures in excess of the refundable claim earn a 10% non-refundable credit that any qualifying corporation can claim, with a 10-year carryforward and 3-year carryback
- BC adopted the federal changes for tax years beginning on or after December 16, 2024, including restored eligibility of capital expenditures as BC qualified expenditures
- Only the BC-attributable share of a distributed team's work qualifies — a remote hire in another province can still count federally but not for the BC credit
Important: Provincial credits are claimed on your British Columbia corporate tax return, separate from your federal T661 filing with the CRA. Ensure you file both to capture the full combined benefit.
Other British Columbia R&D Incentives
Beyond SR&ED, British Columbia offers additional programs that can be stacked with your tax credits.
Innovate BC
Provides programs and funding to help BC companies commercialize technology, including the Ignite program for startups and the Venture Acceleration Program.
Who Should Think Twice
SR&ED isn't the right fit for everyone. Skip the claim if any of these describe you.
- Your R&D is performed outside British Columbia. Without a permanent establishment in BC — and BC-attributable work — none of your expenditures qualify provincially, even if the full amount qualifies federally.
- Your work doesn't clear the federal SR&ED bar. BC has no separate, easier eligibility test: if there's no technological uncertainty resolved through systematic investigation, adding a provincial form doesn't change the answer.
- You expect the BC credit to stack additively on the federal 35%. It doesn't — the credit is real money, but if your financial model assumes 45% combined, fix the model before you count on the cash.
Maximize Your British Columbia SR&ED Credits
Glauq automates your federal and British Columbia provincial SR&ED claims — ensuring you capture every eligible dollar across both programs.
British Columbia SR&ED FAQ
What is the BC SR&ED tax credit?
The BC SR&ED tax credit is a 10% provincial tax credit on qualified SR&ED expenditures incurred in British Columbia. It is refundable for CCPCs and eligible Canadian public corporations up to the federal expenditure limit, and non-refundable for other qualifying corporations. You claim it on Form T666 filed with your T2 corporate return, alongside your federal SR&ED claim.
Is there an expenditure limit for the BC credit?
The refundable portion tracks the federal expenditure limit, which is $6 million for tax years beginning on or after December 16, 2024. Expenditures above what you claim as refundable earn a 10% non-refundable credit with a 10-year carryforward and a 3-year carryback. Unlike provinces with a fixed lower cap, BC's limit moved when the federal limit did.
How much can a BC company claim in combined federal and provincial credits?
Roughly 41.5% of eligible spend for a CCPC, as an illustrative figure — not the 45% a naive sum suggests. The BC credit is government assistance that reduces the base the federal 35% applies to. On $500,000 of eligible salaries, that is $50,000 from BC plus 35% of the remaining $450,000, or $157,500 federally — $207,500 combined. The exact result depends on your expenditure mix and proxy treatment.
Can non-CCPCs claim the BC SR&ED credit?
Yes. Since BC Budget 2026, eligible Canadian public corporations can claim the refundable 10% for tax years beginning on or after December 16, 2024. Other qualifying corporations claim the 10% non-refundable credit, which offsets BC tax payable and can be carried forward 10 years or back 3 years. The rate is the same either way — only whether it arrives as a refund changes.
How do I file for the BC SR&ED credit?
Complete Form T666 and submit it with your T2 Corporation Income Tax Return, entering the refundable credit on line 674 and the non-refundable credit on line 659 of Schedule 5. The claim is due no later than 18 months after the end of the tax year in which you incurred the expenditures — the same hard deadline as the federal claim, with no extensions.
What did BC Budget 2026 change about the SR&ED credit?
Three things. It made the credit permanent, removing the previous legislated expiry date. It confirmed BC follows the federal changes for tax years beginning on or after December 16, 2024, including the $6 million expenditure limit and restored capital expenditure eligibility. And it extended the refundable credit to eligible Canadian public corporations, so refundability is no longer CCPC-only.