Scientific Research and Experimental Development (SR&ED)

• Form T661, SR&ED Expenditures Claim
• Form T2SCH31 or Form T2038(IND) to claim an investment tax credit
• Other forms, as needed: T1145, T1146, T1174, T1263, and any attachments

Who is eligible?

• Corporations that conduct eligible work
• Individuals that conduct eligible work
• Trusts that conduct eligible work
• Partnerships that conduct eligible work

Eligible expenses

• Salary or wages for SR&ED work
• Materials consumed or transformed
• Contracts for SR&ED and third-party payments
• Lease costs of equipment incurred after December 15, 2024
• Overhead and other expenditures under the traditional method, and capital expenditures resulting in the acquisition of depreciable property after December 15, 2024

Ineligible Costs and Activities

• Interest and other financing costs
• A due or fee for membership in a scientific or technical society or organization
• Legal or accounting fees
• Expenditures for the acquisitions of used equipment
• Lease expenditures for buildings

• Review the claim to ensure it is complete, accurate, and supported by evidence.
• Include Form T661, SR&ED Expenditures Claim.
• Include Form T2SCH31 or Form T2038(IND) to claim an ITC, plus other forms as needed.
• Submit the SR&ED claim with the original income tax return or with an amended return for the year.
• Submit electronically using CRA-certified tax preparation software, or by mail if filing a paper income tax return as an individual, trust, or partnership.

• A complete SR&ED claim will generally be processed within 60 calendar days of the date the CRA receives the completed claim and the income tax return for the year.
• Refundable claims selected for review will generally be completed within 180 calendar days of the date the CRA receives the complete claim.
• Claims selected for an expenditure review under the pre-claim approval process will generally be processed within 90 calendar days of the date the CRA receives the complete claim.
• If a claim requires review, the Research and Technology Advisor studies the claim, identifies issues, assesses risk, determines the scope of the review, develops a review plan, and may gather additional information by letter, telephone, or an on-site visit.
• If a claim is accepted as filed, the claimant is notified on the Notice of assessment or reassessment; otherwise, the Research and Technology Advisor prepares the review report, communicates the review results, assists with the proposal package, addresses any representation from the claimant on the review results, and concludes the review.

• Optional pre-claim approval lets the CRA assess, before work starts or costs are incurred, whether a project will meet the definition of SR&ED.
• You can apply for pre-claim approval for up to 3 projects, and each approval is valid for a duration of up to 3 years.
• If this is your first SR&ED claim or you have not submitted a claim in the last 3 years, you may be selected for the First-Time Claimant Advisory Service, a mandatory virtual service for selected claimants.
• The SR&ED Client Portal within My Business Account includes a pre-claim workbook and an exclusive version of the SALT that lets you save and retrieve an in-progress or completed self-assessment.