SR&ED claim assessment and consulting support

SR&ED is a tax credit for eligible scientific research and experimental development work performed in Canada. It is usually claimed by fiscal year and must be supported by technical and financial evidence.

Potentially eligible work must be conducted in Canada, seek scientific knowledge or technological advancement, and address scientific or technological uncertainty through systematic investigation or search by experiment or analysis. Apply this framework to engineering, product development and software alike. Routine development is not enough. helloDarwin screens projects against the CRA eligibility criteria; the CRA decides eligibility.

We review salaries or wages, materials, contracts, third-party payments, and applicable overhead treatment, then connect each amount to specific claimed work and the tax year. Your accountant or tax preparer confirms the filing and tax calculations. See the CRA guide to Form T661 for the current rules.

The strongest support is dated, specific to the work, and created while the work is underway. We organize project notes, test reports, time records, code, prototypes, photographs, contracts, and financial records around the questions in Form T661. The CRA documentation guide explains that no single document is a universal checklist.

helloDarwin screens potential projects, structures the technical narrative, maps financial support, coordinates Form T661 content with your tax filing team, and helps prepare for information requests or review meetings. The Canada Revenue Agency makes the eligibility and expenditure decisions. Read the CRA claim review process.

Yes, but the interaction between grants, tax credits, and SR&ED needs to be reviewed carefully. Some funding can affect eligible expenditures or the final claim amount. A broader funding strategy helps determine whether SR&ED, grants, or both should be pursued for a project.

Software development may qualify when the work involves technological uncertainty and a systematic process of experimentation or analysis. Routine development, configuration, integration, or feature delivery is usually not enough on its own. The file needs to show what technical obstacle existed, what was tested, and what was learned.

Contracted work may qualify when SR&ED is performed on your behalf in Canada and relates to your business. Review the agreement and actual work, including any subcontracting. Separate routine deliverables from SR&ED and document a reasonable allocation when a contract includes both.

Generally, 80% of an eligible arm’s-length SR&ED contract expenditure enters the qualified-expenditure calculation for the investment tax credit (ITC). This is not an 80% refund. Non-arm’s-length contracts follow different rules, including possible transfers of qualified expenditures; do not apply the 80% treatment automatically.

Read the CRA contract expenditure policy. For a worked example and records checklist, see our SR&ED guide.

Engineering, design, programming, testing or data collection may be support work when directly supporting eligible basic research, applied research or experimental development and commensurate with its needs. A task does not qualify simply because it belongs to an R&D project. Routine quality control and commercial production are excluded.

Connect each supporting task to the experiment or analysis it serves. Retain its purpose, dates, contributors, results, time and allocated costs. For contracted support work, connect the agreement and invoices to that same evidence. The claimant may have eligible contract costs even when an arm’s-length contractor performing only support work cannot claim that work on its own.

See the CRA work eligibility criteria and contract expenditure policy.