Quebec’s March 25, 2025 budget consolidated innovation funding into two main programs: CDAE and CRIC. Understanding the difference between CDAEIA vs CRIC determines whether your company recovers 30% or 65% of R&D costs.
CDAEIA vs CRIC at a Glance
| Tax Credit | CDAEIA | CRIC |
|---|
| Target | IT companies with AI integration | Any company conducting R&D |
| Rate | 30% (23% refundable, 7% non-refundable in 2025) | 30% for SMEs, 15% for large corps |
| Eligible costs | Salaries only | Salaries + Subcontractors’ costs + 3rd party payments + Equipment for the purpose of R&D |
| Minimum employees | 6 eligible full-time | No minimum |
| Revenue Tests | 75/50/75% thresholds required | None |
| AI requirement | Must significantly integrate AI (2026+) | Must demonstrate technological uncertainty |
| Salary cap | No cap, $18,571 exclusion per employee | $50,000 or the total of the threshold related to R&D employees and the threshold relation to pre-commercialization employees (whichever is greater) |
CDAEIA: Who Qualifies
Eligible if your company:
- Maintains 6+ eligible full-time employees (75% time on qualifying activities)
- Derives 75% of gross revenue from the IT sector
- Earns 50% of gross revenue from software publishing, systems design, or data processing/hosting
- Generates 75% of eligible revenue from arm’s-length clients
Critical 2026 change: Activities must significantly integrate AI functionality. AI cannot be cosmetic; it must substantially modify system performance or processes.
Rate reduction: If 50%+ of revenue comes from related-party services for applications used exclusively outside Quebec, the rate drops to 15%.
Credit Calculation Example
Software company with 10 employees averaging $120,000 salary:
- Eligible salary per employee: $120,000 – $18,571 = $101,429
- Total eligible: $1,014,290
- CDAEIA credit (23% refundable): $233,287
- Plus non-refundable 7%: $71,000
- Total: $304,287
CRIC: Broader R&D Support
CRIC replaced Quebec’s previous SR&ED provincial credits. Fully refundable for SMEs.
Eligible expenditures:
- Salaries/wages
- Subcontractors’ costs
- 3rd party payments
- Equipment for the purpose of R&D
Rates:
- 30% refundable for SMEs
- 15% non-refundable for large corporations
Exclusion threshold: Greater of $50,000 or basic personal amount ($18,751 in 2025) per employee, prorated by R&D time.
Equipment Changes the Game
CRIC now covers equipment, a major shift. Manufacturing, robotics, and hardware companies gain a significant advantage.
Exemple: A $500,000 equipment purchased for the purpose of R&D generates $150,000 immediate credit (provincial), stackable with federal SR&ED.
The strategic decision: CDAEIA vs CRIC
Most companies don’t choose; they claim both. The question is optimization.
Pure Software Development Shop
Profile: Saas company, 20 developers, minimal equipment costs.
Strategy: Maximize CDAEIA for full salary coverage. Layer CRIC on R&D activities addressing technological uncertainty.
Combined recovery: Up to 65% when stacking with federal SR&ED (35%)
Hardware-Software Hybrid
Profile: Robotics firm, significant equipment purchases, custom software development.
Strategy: Prioritize CRIC for equipment credits. CDAEIA may not apply if revenue tests fail.
IT Services Consultant
Critical issue: If most work is for related entities, CDAEIA won’t apply. For CRIC on client work, you must retain intellectual property (IP) rights.
Documentation becomes critical: Without proper IP ownership, neither program applies to billable projects
Key Deadlines and Compliance
CDAEIA:
- Application to Investissement Québec: 18 months after fiscal year-end
- Requires annual corporation and employee certificates
- Early adoption election: Written notice to Investissement Québec
CRIC:
- Filing deadline: 18 months after the taxation year-end
- Final deadline for abolished SR&ED credits: September 25, 2026
Quick CDAEIA vs CRIC Action Checklist
- Calculate revenue composition against CDAEIA’s 75/50/75 tests
- Assess AI integration level in your activities (significant vs superficial)Assess AI integration level in your activities (significant vs superficial)
- Review employee time allocation (need 75% on qualifying activities)
- Verify IP ownership structure for client work
- Identify equipment purchases that now qualify for CRIC
- Implement time-tracking systems for both programs
- Plan Investissement Québec application timeline
The Bottom Line
CDAEIA suits IT companies with clear AI integration and arm’s-length client revenue.
CRIC fits any business conducting systematic R&D to resolve technological uncertainty, especially valuable for equipment-intensive operations.
Both together: Properly structured companies recover 65% of R&D costs when combining provincial programs with federal SR&ED.
The difference between reactive claiming and strategic planning: $200,000+ annually for mid-sized tech companies.
Contact one of our experts today to maximize funding from both credits for your company!
