Short answers to the questions the academy is asked most about Canada's Scientific Research and Experimental Development program, grouped the way the country guide is organised: eligibility, costs and calculation, claiming and deadlines, and reviews. Each answer gives the rule in a sentence or two and links to the page that covers the subject in full, with the official sources. The answers describe the federal program; provincial credits are covered on their own page. This page carries FAQPage structured data.
Eligibility
Who can claim SR&ED tax incentives?
Corporations, individuals, trusts and partnerships that carry on SR&ED in Canada. The enhanced 35% credit is for most Canadian-controlled private corporations (CCPCs) and, for tax years beginning after 15 December 2024, eligible Canadian public corporations. Others receive the basic 15% credit. See eligibility.
What counts as SR&ED?
Systematic investigation or search carried out in a field of science or technology by means of experiment or analysis. It covers basic research, applied research and experimental development, and support work that directly supports them. The CRA asks two questions: why was the work done, which needs a scientific or technological uncertainty, and how was it done, which needs a systematic investigation. See eligibility.
Does the project have to succeed?
No. A failed attempt to resolve a technological uncertainty is still SR&ED if the work was systematic. SR&ED ends when the uncertainty is resolved or the work is abandoned.
Is our software development SR&ED?
Only the experimentation needed to resolve a technological uncertainty that standard practice could not resolve. Building features with known techniques, integration through documented interfaces and routine debugging are not SR&ED, however new the product. See industries.
Can we claim for work done outside Canada?
Generally no. A limited allowance applies for salaries of Canadian-resident employees working abroad as part of Canadian SR&ED, and contract payments for work outside Canada earn no credit. See eligibility.
Costs and calculation
Which expenditures qualify?
Salaries and wages of employees directly engaged, materials consumed or transformed, 80% of arm's length contract and third-party payments, overheads under the traditional method or a prescribed proxy amount under the proxy method, and capital expenditures for property acquired on or after 16 December 2024. Government assistance and contract payments received reduce the total. See eligible expenditure.
How much is the credit worth?
An enhanced rate of 35% on qualified expenditure up to C$6 million a year for most CCPCs and eligible Canadian public corporations, and a basic rate of 15% on expenditure above the limit and for other claimants. See CCPC enhanced refund.
Is the credit refundable?
For most CCPCs at the enhanced rate, current expenditure is 100% refundable and capital expenditure 40% refundable, up to the limit. Other credits reduce tax, and unused credits can be carried back 3 years or forward 20 years. See CCPC enhanced refund.
What is the proxy method?
An election to claim a prescribed proxy amount, calculated as a percentage of directly engaged salaries, instead of itemising overheads. The traditional method itemises overheads that are directly related and incremental to the SR&ED. See proxy versus traditional method.
Who is a specified employee, and why does it matter?
Broadly, an employee who owns 10% or more of any class of the company's shares, or is related to such a person. Their salary is capped in the claim, their bonuses are excluded and their contribution to the proxy salary base is limited, so owner-managed companies should model the effect before relying on the credit. See eligible expenditure.
Do provincial credits reduce the federal claim?
Yes. Provincial R&D credits are government assistance and reduce qualified expenditures for the federal credit. See provincial credits.
Claiming and deadlines
Do we have to register before we claim?
No. There is no registration. Optional pre-claim approval has been available since 1 April 2026, to have planned work assessed before you incur most of the cost. See how to claim.
Which forms do we file?
Form T661 to describe the SR&ED work and calculate the expenditure, with Schedule 31 for a corporation's credit or Form T2038 (IND) for an individual, filed with the income tax return. See Form T661.
What is the deadline?
The claim is filed with the income tax return, and no later than 12 months after the return's filing due date. For a corporation that is 18 months after year end, and it cannot be extended. See deadlines.
Reviews
What happens if the CRA reviews our claim?
A Research and Technology Advisor reviews the projects and a Financial Reviewer the expenditures, usually before the claim is assessed and the refund paid. They ask for records made as the work happened and interview the technical staff. Disagreements can go to objection and the Tax Court of Canada. See CRA reviews and documentation.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.