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Can you qualify for SR&ED compensation as a Medical Physician?

Under the Income Tax Act, SR&ED compensation is eligible for projects that work to resolve uncertainty in the field of science and technology. Under these premises, board-certified physicians can qualify for SR&ED funding.

The claiming process differs depending on whether the physician is acting as an independent contractor/unincorporated business or if they are a physician-employee executing their role for a medical professional corporation (MPCs)/incorporated business.

Physicians as Independent Contractors

As an independent contractor, the physician can conduct research projects for the benefit of their own medical practice and/or on behalf of an outsourcer. The physician will apply for their SR&ED claim as an individual. If they are working on behalf of another party, all costs to be submitted for SR&ED funding must be incurred and paid for by the physician.

Under these circumstances, only salaries and benefits payable to the employees performing the research can be claimed for SR&ED income tax credit (ITC).

Physician-employees and MPCs

MPCs are defined as corporations established by one or more physicians that practice a regulated health care profession and abides by the provincial or territorial laws where it is situated. In this case, the physician is a direct employee of the corporation and are thus, physician-employees.

Four different scenarios are often encountered here:

  1. The MPC is starting their own SR&ED initiative, the work is executed by their own physician employees and during the process, they incurred expenditures. Here, the MPC will file for SR&ED and they can claim ITC and related expenditures (e.g. physician-employee wages).
  2. The MPC is doing contractual work on behalf of another party and their physician-employees are completing the work. The MPC will claim for SR&ED.
  3. The physician-employee of an MPC is doing contractual work for another party and only the physician is listed on the contract regarding the SR&ED work. The physician will apply as an individual. 
  4. The MPC can conduct their own and contractual SR&ED work and as a corporation, can file a SR&ED claim.

Documentation

The following documents should be made available to the CRA upon filing of claims: 

  1. Relationship-contractual agreements: Document clearly indicating the relationship of all involved parties in the SR&ED project. (Note: Written agreements is preferred by the CRA for evidence of SR&ED work; however, secondary documents such as emails can be submitted.)
  2. Research-related documents: Documentation of the work performed and all expenditures to be claimed for SR&ED.

Obstacles to SR&ED Claims by Medical Professionals

While SR&ED is surely available for medical doctors, they are an under-represented group for professions that ultimately claim and receive SR&ED funding. 

To understand how to apply for SR&ED as a medical doctor or get help on the process, contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.