Nova Scotia research and development tax credit

You can claim this credit if you have a permanent establishment in Nova Scotia and if you made eligible expenditures for research and development carried out in Nova Scotia.

The credit is equal to 15% of eligible expenditures. The credit is fully refundable, but must first be applied against total taxes payable.

You can renounce the research and development tax credit for eligible expenditures incurred during the year under subsection 41(7) of the Income Tax Act (Nova Scotia).

A corporation that disposed of a property used in research and development, or converted the property to commercial use, may have to report a recapture of any Nova Scotia research and development tax credit previously calculated on that property. Any recapture will create or increase Nova Scotia tax otherwise payable.

Claiming the credit

File a completed Schedule 340, Nova Scotia Research and Development Tax Credit, with the return. See the schedule for more details.

On line 566 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of credit earned in the year.

Reporting a recapture

To calculate the recapture, complete Schedule 340.

On line 221 of Schedule 5, enter the amount of recapture calculated.

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