Tech startup accountant in Montreal

For the Quebec picture beyond the tech sector, see accounting across Quebec; for the corporate returns themselves, the T2 and CO-17 in Montreal.

SR&ED starts with the timesheet, not the claim

Scientific research and experimental development is claimed on Form T661, filed with the corporate return. What qualifies is work that tries to resolve a technological uncertainty through systematic investigation, and what gets paid for is mostly the salaries of the people doing it. For a Mile End game studio or an AI team, that distinction is sharp. Building a new rendering technique or a model architecture that nobody knew would work can qualify. Producing levels, art, content or routine integration generally does not, however hard it was.

The claim is only as good as the records made while the work happened: who worked on which project, for how long, what the uncertainty was and what was tried. Reconstructing that from memory eighteen months later is where claims get cut. The bookkeeping sets up project tracking from the first salaried developer, so the evidence exists before anyone writes the technical narrative. SR&ED expenditure limit covers the recent federal change.

The enhanced credit, and what reduces it

A Canadian-controlled private corporation can earn an enhanced refundable SR&ED credit, which matters for a startup because refundable means cash, even in a year with no taxable income. That cash is often the difference between a comfortable runway and a tight one. Control is the condition to watch: a financing round that brings in non-resident or public-company investors can change whether the corporation is still a CCPC, and with it the credit.

Grants and other government assistance reduce the expenditures the credit is calculated on. A startup that takes a program grant for the same salaries it later claims under SR&ED has to net one against the other, and a claim that ignores the grant is overstated. Every grant is recorded against the project and period it funded, so the reduction is calculated rather than guessed.

Stock options before there is any money

Options are how a Montreal startup competes for developers it cannot yet pay market salaries. When the company is a CCPC, an employee who exercises options is generally not taxed at exercise; the benefit is taxed when the shares are eventually sold. That deferral is valuable, but it depends on the company’s status at the time of the grant, and it produces a tax event years later that the employee will need records for. The company keeps a register of each grant: the date, the number of options, the exercise price and what the shares were worth. A cap table that lives only in a founder’s spreadsheet is the usual gap, and it tends to surface during due diligence for the next round, which is the worst moment to rebuild it.

Founders’ salary versus dividends

Salary and dividends behave differently in a tech company than in most businesses. Salary paid to a founder who does qualifying development work can be part of the SR&ED base; a dividend cannot. Salary also brings QPP, QPIP and the employer’s Health Services Fund contribution, and counts toward the 5,500 paid hours that Quebec’s small business deduction depends on — a threshold a two-founder company often misses. Dividends avoid the payroll costs but support neither the credit nor the hours. The right answer changes as the company raises money and hires. Payroll in Montreal covers the deductions once salary starts.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 and CO-17 corporate returns with year-end financial statements
• SR&ED claim support on Form T661, with project-level cost tracking
• Government assistance recorded against the projects it funded
• Stock option register and employee benefit reporting
• Founder pay modelled across salary and dividends
• GST and QST returns filed with Revenu Québec

Fixed fees, fully online

Startups generally want two things from an accountant: a number they can budget, and answers between filings. The fee is fixed and agreed before work starts, so a question about a term sheet in June does not start a meter. A typical package combines monthly bookkeeping, payroll and the year-end, and a fractional CFO arrangement from $2,500 a month is there for the stage when investors want forecasts. See what it costs.

Remote startup accounting from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, working with Montreal founders entirely online. There is no Montreal office and no local staff. Meetings are held by video or phone, documents come through a secure upload link, and signatures are electronic. EverStone works in English, which suits founders who want the SR&ED rules, the option register and the Quebec returns explained plainly in the language they work in.