SR&ED Tax Credit: Maximize Your Tax Deduction
Recover up to 35% of your R&D expenses with Canada's most generous tax credit program
What is the SR&ED Tax Credit?
The SR&ED tax credit is a federal program administered by the Canada Revenue Agency (CRA) that offers tax incentives in the form of cash refunds or income tax reductions. It aims to reward businesses that conduct R&D activities in Canada, thereby contributing to the country's technological and scientific advancement.
CCPCs (Private Corporations)
Refundable credit of 35% up to $3M in eligible expenses.
Other Corporations
Non-refundable credit of 15% usable to reduce income tax payable.
Benefits of the SR&ED Program
Discover why thousands of Canadian companies trust the SR&ED program
Non-dilutive financing
Unlike capital investment, tax credits do not dilute your stake in the business.
Increased liquidity
Refunds can improve your working capital and finance future projects.
Competitive advantage
By reducing the cost of R&D, the program allows you to innovate more and stay competitive.
How Does Tax Credit Claiming Work?
The SR&ED tax credit claiming process may seem complex, but it can be simplified by following a structured approach. Our SR&ED claim experts help you navigate this process successfully.
Identification of eligible projects
The first step is to determine which of your business activities qualify as R&D according to CRA criteria.
Technical documentation
It is crucial to document hypotheses, experiments, analyses and conclusions of your projects in a contemporary manner.
Expense tracking
You must compile all eligible expenses, including salaries, materials, subcontracting contracts and overhead costs.
Application preparation
The SR&ED credit application is submitted with your tax return and includes forms T661 and Schedule 31.
Defense in case of review
The CRA may select your application for review. Our experts assist you in defending the legitimacy of your claim.
Our SR&ED Claim Experts
Calling on SR&ED claim experts is the safest way to maximize your tax credit while minimizing the risks of refusal or review.
Our multidisciplinary team consists of engineers, scientists and tax specialists who understand both the technical subtleties of your R&D and the CRA's tax requirements.
Our Approach
Free evaluation
We analyze your claim potential at no cost or commitment.
Complete support
We help you document your projects and build a strong case.
Credit maximization
We identify all eligible expenses to ensure maximum return.
Post-claim support
We represent you in case of CRA review.
SR&ED Tax Credit Eligibility Criteria
For a project to be eligible for the SR&ED tax credit, it must meet three fundamental criteria defined by the CRA:
Scientific or technological advancement
The project must aim to advance knowledge or technological capability in a field.
Scientific or technological uncertainty
There must be uncertainty about how to achieve the objective or about the objective itself, which cannot be resolved by existing public knowledge.
Scientific or technological content
The project must follow a systematic approach to investigation or research, through experimentation or analysis.
Maximize Your SR&ED Tax Credit
To get the most out of the program, it is essential to adopt best practices from the start of your R&D projects.
Document everything
Keep a detailed record of your activities, meetings, tests and results.
Separate expenses
Set up an accounting system that makes it easy to track R&D-related expenses.
Train your team
Educate your technical employees on the importance of documentation for the SR&ED credit.
Consult experts
Don't wait until the end of the year to think about your claim. Early support is the key to success.
The SR&ED tax credit is an exceptional opportunity for innovative businesses in Canada. By partnering with experts, you ensure you fully benefit from this tax advantage and propel your growth.
FAQ
What is the SR&ED tax credit?
The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive that supports Canadian businesses conducting research and development. It rewards experimental development, applied research, and basic research with refundable or non-refundable tax credits, helping companies recover costs tied to technological advancement and innovation.
What activities are eligible for SR&ED?
Four categories qualify for SR&ED: experimental development aimed at technological advancement, applied research with a practical goal, basic research without a practical application, and support work such as engineering, design, programming, data collection, or testing that directly backs eligible projects. The work must seek to resolve technological uncertainty.
Which activities are not eligible for SR&ED?
Ineligible SR&ED activities include market research, sales promotion, quality control, routine testing, social science or humanities research, mineral and petroleum exploration, commercial production of new products, style changes, and routine data collection. These tasks lack the technological uncertainty and advancement that define qualifying SR&ED work.
What expenses qualify for the SR&ED tax credit?
Eligible SR&ED expenses include salaries and wages, materials consumed or transformed, subcontracting fees, and overhead. Capital expenditures such as equipment and machinery have been excluded since 2014, but may still be deducted from business income as a depreciation expense.
Can I claim SR&ED for a failed or abandoned project?
Yes. Projects that are unsuccessful, abandoned, delayed, or discontinued can still qualify for SR&ED tax credits, provided they were undertaken with the intent of technological advancement. The Canada Revenue Agency focuses on whether the work meets the definition of SR&ED, not on whether it succeeded commercially.
How long does it take to receive an SR&ED refund?
The Canada Revenue Agency aims to process accepted SR&ED claims within 60 calendar days of receiving a complete claim. Refundable claims selected for review or audit are generally completed within 180 calendar days of receiving a complete claim.
What is the SR&ED filing deadline?
For corporations, the SR&ED reporting deadline is 18 months from the end of the tax year in which the expenditures were incurred. If your business recently learned about the program, you may still claim credits for eligible past years that fall within this window.
Can I claim SR&ED for subcontracted R&D work?
Yes, if the contract clearly states that SR&ED is performed on the payer's behalf. When this is unclear, eligibility is assessed using four criteria: control of the work, intellectual property ownership, pricing versus risk assumed, and whether the agreement is for a service or for a product.
Is my work eligible if similar products already exist?
Yes. SR&ED focuses on how your business pursues a technological goal, not on whether similar products exist. As long as your solution is not built from publicly available information, two companies can target the same result through different approaches and both may qualify for SR&ED credits.