New SR&ED T661 Form Launched

On November 10, 2008, the Canada Revenue Agency published the following update:

What's new – Changes to the T661 form

Form T661, Claim for Scientific Research and Experimental Development (SR&ED) Carried out in Canada, has been revised. The new version, Form T661 (08), is effective as of November 10, 2008. We encourage you to start using the new form immediately.

If you file an SR&ED claim for a tax year ending on or prior to December 31, 2008, we will accept the new or the old version of the form. For tax years ending after December 31, 2008, we will only accept the new version of the form.

The following changes have been made:

• The title of the form has been changed.
• The line descriptions have been reworded, using plain language, to be clearer as to what is required and legislative and policy references have been removed.
• The financial sections have been reorganized for a more logical flow.
• Part 2 - Project information” has been completely restructured to gather relevant information with respect to the scientific and technological aspects of the SR&ED projects claimed. There is now a precise format for providing project details and the previous free-flowing questions have been replaced with more clear, concise, direct questions.
• All schedules (A to F) have been removed or incorporated into the form as follows:

• Third-Party Payments” (Schedule A) has been removed from the T661 and is    now Form T1263;
• Special Situations” (Schedule B) is now in Part 3 and Part 4;
• Non-Arm's Length Transactions” (Schedule C) is now in Part 4;
• Calculation of Salary Base and Prescribed Proxy Amount” (Schedule D) is now Part 5;
• List of all SR&ED projects claimed in the year” (Schedule E) is now in Part 2; and
• Arm's Length and Non‑Arm's Length SR&ED Contracts” (Schedule F) is now in Part 2.

• Line 305 - The maximum pensionable earnings under the Canada Pension Plan are revised to $44,900 for 2008. Therefore, the maximum amount of salary or wages per specified employee that you can include on line 305 is $224,500 ($44,900 x 5) for a tax year that ends in 2008.
• Lines 307 and 309 have been added to reflect the new permissible salary or wages for SR&ED performed outside Canada after February 25, 2008 as announced in the February 2008 budget.
• Part 5 - Calculation of prescribed proxy amount (PPA) - The maximum pensionable earnings under the Canada Pension Plan are revised to $44,900 for 2008. Therefore, the maximum amount of salary or wages that you can include in the salary base of a specified employee in box 858, column 5, to determine the proxy amount reported on line 502, is $112,250 ($44,900 x 2.5) for a tax year that ends in 2008.

The official CRA web site location that this article can be obtained from is: http://www.cra-arc.gc.ca/E/pbg/tf/t661/README.html