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Source verified August 10, 2026
Scientific Research and Experimental Development (SR&ED)
Tax incentives for business R&D in Canada
Latest source updateLast Update: June 25, 2026Latest change: SR&ED guidance was updated to restore shared-use-equipment eligibility for property acquired after December 15, 2024 and to revise Form T661 instructions.View change
Latest source update
Last Update: June 25, 2026
Latest change: SR&ED guidance was updated to restore shared-use-equipment eligibility for property acquired after December 15, 2024 and to revise Form T661 instructions.
SR&ED rules and Form T661 updated
SR&ED policy guidance now states that first-term and second-term shared-use-equipment rules apply only to property acquired after December 15, 2024, and that capital expenses for scientific research and experimental development for property acquired after that date are eligible again. The Spring 2026 SR&ED update also confirms higher enhanced ITC limits of $3 million -> $6 million, phase-out thresholds of $15 million -> $75 million, and continued eligibility for capital expenditures made after December 15, 2024. Form T4088 and the Form T661 instructions were also updated: the guide is being revised, and users are directed to interim SR&ED news and updates for the new line numbers on Form T661. The new instructions now cover capital expenditures information, pre-claim approval case numbers, and lease-cost rules tied to the December 15, 2024 effective date.
Funding available
Up to 35% of project cost
Deadline
Open continuously
Location
Canada
Overview
Scientific Research and Experimental Development (SR&ED) tax incentives help corporations, individuals, trusts, and partnerships conducting eligible research and development in Canada through a deduction against income and an investment tax credit, generally at 15% and up to 35% in some cases. Eligible work includes basic research, applied research, and experimental development.
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Opportunity Score
Moderate potential, but conditions must align.
At a glance
Funding available
Financing goals
- Develop a new product or service
- Conduct research and development activities
- Conduct research or evaluation activities
Eligible Funding
- Up to 35% of project cost
Funds Providers
Eligible candidates
Eligible Industries
- All industries
Location
- Canada
Legal structures
- Sole proprietorship
- For-profit business
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- All groups
Next Steps
1
Determine your project
2
Validate your eligibility
Activities funded
- Basic research
- Applied research
- Experimental development
- Support work that matches the needs of and directly supports eligible SR&ED work
Documents Needed
- 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
Official resources
Program guide
Application form
Supporting document
Eligibility
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
Eligible geographic areas
- Canada
How to apply
- 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.
Processing and Agreement
- Complete claims are generally processed within 60 calendar days after the CRA receives the completed claim and the income tax return for the year.
- Refundable claims selected for review are generally completed within 180 calendar days, and claims selected for an expenditure review under the pre-claim approval process are generally processed within 90 calendar days.
- If your claim is incomplete, you must submit the missing information before the SR&ED reporting deadline; after that deadline, additional information will not be accepted and the SR&ED expenditures and related ITC will be lost.
- If further review is needed, the CRA may request an on-site or virtual meeting and supporting records to understand the work done and how the expenses were determined.
- If your claim is accepted as filed, you will be notified on your Notice of assessment or reassessment, and you may file an objection up to 90 days from the date of your Notice of assessment or reassessment if you disagree with the decision.
Additional information
- 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.
Contacts
Frequently Asked Questions about the Scientific Research and Experimental Development (SR&ED) Program
What is the Scientific Research and Experimental Development (SR&ED)?
Scientific Research and Experimental Development (SR&ED) tax incentives help corporations, individuals, trusts, and partnerships conducting eligible research and development in Canada through a deduction against income and an investment tax credit, generally at 15% and up to 35% in some cases. Eligible work includes basic research, applied research, and experimental development.
How much funding can be received?
Scientific Research and Experimental Development (SR&ED) Funds up to 35% of admissible expenses.
Who is eligible for the Scientific Research and Experimental Development (SR&ED) program?
To be eligible for the Scientific Research and Experimental Development (SR&ED) program, you must:
Claimants must be corporations, individuals, trusts, or partnerships that conduct eligible work.
The work must be conducted in Canada.
The work must be carried out for scientific knowledge advancement or technological advancement and be a systematic investigation or search by experiment or analysis.
What expenses are eligible under Scientific Research and Experimental Development (SR&ED)?
Basic research
Applied research
Experimental development
Support work that matches the needs of and directly supports eligible SR&ED work
Who can I contact for more information about the Scientific Research and Experimental Development (SR&ED)?
You can contact Canada Revenue Agency (CRA) by email at OESCPB-SVEDGPO@cra-arc.gc.ca.
Where is the Scientific Research and Experimental Development (SR&ED) available?
The Scientific Research and Experimental Development (SR&ED) program is available across Canada.
Is the Scientific Research and Experimental Development (SR&ED) a grant, loan, or tax credit?
Scientific Research and Experimental Development (SR&ED) is a Tax Credits