Québec’s new CRIC credit changes the rules for April-year-end SMEs

Quebec’s new research, innovation and commercialization tax credit, or CRIC, replaces the provincial part of the old RS&DE program for tax years beginning after March 25, 2025. SMEs with an April 2026 year-end are among the first to file under the new rules, making early documentation and expense review critical.

Why it matters: - The CRIC changes how Quebec SMEs claim provincial tax support for research, innovation and commercialization. - Businesses with an April 2026 year-end are among the first to file a claim fully under the new regime. - The shift can affect cash flow, eligible expense calculations and how companies document projects.

What happened: - The new Crédit d'impôt pour la recherche, l'innovation et la commercialisation replaces the provincial portion of Quebec’s former RS&DE tax credit. - The CRIC was introduced in Quebec’s 2025-2026 budget. - The new rules apply to tax years that begin after March 25, 2025. - Progrès Conseils, a Montreal firm focused on RS&DE and CRIC claims since 2003, is advising Quebec and Ontario companies through the transition.

The details: - The CRIC uses a new rate structure for eligible expenses. - A 30% rate applies to the first $1 million of eligible expenses. - A 20% rate applies above that threshold. - The former provincial grid applied 30% up to $3 million and 14% above that. - Expenses tied to pre-commercialization and product certification or homologation, including prototyping and scale-up, now need clearer separation from core R&D costs. - Subcontracting expenses now receive a uniform 50% rate, regardless of subcontractor type. - Companies whose fiscal year began before March 26, 2025 continue under the old provincial RS&DE rules for that period. - Companies with a new fiscal year starting after that date move to the CRIC rules. - Quebec SMEs that end their fiscal year in April 2026 will be among the first to prepare a return entirely under the new framework. - The federal RS&DE credit remains in place. - The combined federal and Quebec credits can still represent a meaningful share of eligible costs, especially wages tied to R&D. - Eligibility still depends on the company structure, expense type, project nature and reporting period.

Between the lines: - The CRIC is more than a name change; it creates a tighter filing process and a different expense mix. - SMEs used to the old Quebec RS&DE rules may face higher risk of classification errors if they wait until year-end to organize files. - The most vulnerable claims are likely to be those with mixed R&D and pre-commercialization work, where documentation was already thin.

What's next: - SMEs should confirm their fiscal year-end now to determine which provincial rules apply to the next claim. - Companies should separate R&D from pre-commercialization expenses before filing. - Project documentation should be updated as work progresses, not only at year-end. - Businesses should validate eligibility with a specialist before submitting a CRIC claim. - Progrès Conseils says Quebec firms can also get support by phone at +1 514-799-3316, by email at contact@progres.ca, or through its LinkedIn page.

The bottom line: - Quebec SMEs with April 2026 year-ends should prepare now, because their first CRIC claim will require new expense rules, tighter documentation and closer timing discipline.